The eternal VAT question

[saltwater_gypsy]

Here is chance to put this one to bed . My own experience in 15,000miles of cruising abroad is that I have never been asked. So here goes.

 

[Koeketiene]

You should have added being asked about the RCD to your poll

 

[dukes4monny]

what has a Residual Current Device got to do with VAT?

 

[Koeketiene]

what has a Residual Current Device got to do with VAT?

You're right - what was I thinking

 

[dukes4monny]

You're right - what was I thinking

Sorry, couldn't resist it, I'm having one of those days today

I think that this is a very good poll to have saltwater_gypsy, it would be a good one to make 'sticky'........

 

[Coaster]

Surely anyone is asked to produce an original VAT receipt when now selling a boat, of substantial value, if the age and circumstances are appropriate? When we sold our previous boat, last year, the buyer asked for the original sale receipt. I thought that was standard practice.

 

[Cantata]

You don't have to go abroad to be asked.
Mate of mine bought a boat in 2008 from a German owner based in the Baltic. First owner was British and boat was kept then in UK.
New owner has just had a letter from HMRC suggesting that as a result of a 'marina survey' he has been specially chosen for a documentation check, including VAT status. Surprise surprise.

 

[Tranona]

You don't have to go abroad to be asked.
Mate of mine bought a boat in 2008 from a German owner based in the Baltic. First owner was British and boat was kept then in UK.
New owner has just had a letter from HMRC suggesting that as a result of a 'marina survey' he has been specially chosen for a documentation check, including VAT status. Surprise surprise.

That is hardly surprising as if it was bought outside the EU (you are not clear here) then VAT could indeed be due on re-importation into the EU. He may be in for a nasty surprise.

It is important to understand that VAT is not an asset tax, but a transaction tax, so it is the nature of the transaction that triggers the tax. The law is quite clear as is the HMRC guidance that a boat that leaves the EU can only (normally) be brought back in by the person who took it out. If it changes hands outside - even to another EU citizen, VAT is payable if it is brought back into the EU.

This seems to be a good example of a specific HMRC investigation because they believe an offence has been committed, not a random check.

 

[Cantata]

That is hardly surprising as if it was bought outside the EU (you are not clear here) then VAT could indeed be due on re-importation into the EU. He may be in for a nasty surprise.....

Sorry I wasn't clear - boat has always been within the EU.

 

[JonJon]

Just replying to try and move the poll up the list

 

[Tranona]

Sorry I wasn't clear - boat has always been within the EU.

In that case I assume the Bill of Sale will be in Germany between two EU residents. In which case HMRC will be satisfied. If you look at the VAT guidance you will see that it is the parties to the transaction and where the transaction takes place that is important. I bought my boat in Greece so the Bill of Sale and the VAT invoice is in Greek format (although in English).

I suspect however with your mate that they have seen something that suggests worth investigating as random checks don't seem to take place.

 

[hoverjumper]

Finance

When I bought my boat last year the mortgage company (Lombard) reduced the mortgage advance by the value of VAT due to no proof of VAT being available.

I now worry about crossing the North Sea without this elusive piece of paper!

 

[Tranona]

When I bought my boat last year the mortgage company (Lombard) reduced the mortgage advance by the value of VAT due to no proof of VAT being available.

I now worry about crossing the North Sea without this elusive piece of paper!

Don't worry! The finance company are only covering their backs based on HMRC advice. As this poll is clearly showing the chances of being asked for the document is almost nil (we don't know from the poll in what context it was asked for). The reason why HMRC say the only proof of VAT payment is the original invoice is because it is true. No other records are kept except by the VAT trader who sold the boat - and then only for 6 years - assuming he is still in business. So if they believe a VAT offence has occured in relation to the transaction that triggered VAT on your boat, the only document of proof is the original invoice - although this still does not prove that it was properly accounted for. However, it is not an offence to not have the document. You as a private individual cannot commit a VAT offence unless you personally imported the boat - so sleep peacefully and carry on with life.

 

[goboatingnow]

Tranona, you speak the thruth, slay the VAT myth monster

 

[Tranona]

Tranona, you speak the thruth, slay the VAT myth monster

I try to slay it at least once a week when the subject comes up on one of the fora! Cannot believe the level of ignorance when you can get an idiot's guide from the RYA site and chapter and verse from the HMRC site.

It helps of course if, like me you have to do your own VAT returns so need to be up to speed on the subject.

 

[grumpy_o_g]

Typical that I can beat the odds when it comes to being picked on by C&E - despite not owning a boat and having done no more than a dozen or so channel crossings in the last 20 years I've been asked twice for the documentation of the boat I was on, once in Cherbourg and once Caen (it was Oustri wot-sit but I can't spell that). I'm obviously a dubious character.

 

[westernman]

Typical that I can beat the odds when it comes to being picked on by C&E - despite not owning a boat and having done no more than a dozen or so channel crossings in the last 20 years I've been asked twice for the documentation of the boat I was on, once in Cherbourg and once Caen (it was Oustri wot-sit but I can't spell that). I'm obviously a dubious character.

Were you asked for anything else other than the registration document (SSR or Part I) and passports for the crew?

 

[Powersalt]

Don't worry! The finance company are only covering their backs based on HMRC advice. As this poll is clearly showing the chances of being asked for the document is almost nil (we don't know from the poll in what context it was asked for). The reason why HMRC say the only proof of VAT payment is the original invoice is because it is true. No other records are kept except by the VAT trader who sold the boat - and then only for 6 years - assuming he is still in business. So if they believe a VAT offence has occured in relation to the transaction that triggered VAT on your boat, the only document of proof is the original invoice - although this still does not prove that it was properly accounted for. However, it is not an offence to not have the document. You as a private individual cannot commit a VAT offence unless you personally imported the boat - so sleep peacefully and carry on with life.

but my understanding is that he will in fact be the importer if he cannot prove vat has been paid and so will be liable for the vat!

 

[Tranona]

but my understanding is that he will in fact be the importer if he cannot prove vat has been paid and so will be liable for the vat!

No. HMRC would have to show that the boat was indeed imported. You can demonstrate the boat has always been in the UK/EU without having a VAT receipt. You also have to remember that an individual cannot commit a VAT offence except if he privately imported the boat. They would only investigate if they believed such an offence has been committed. As the OP seems to have bought the boat from a private EU citizen, no VAT was due on that transaction, so it would have to be a previous owner who might have imported it and he would be responsible for paying the VAT.

 

[grumpy_o_g]

Were you asked for anything else other than the registration document (SSR or Part I) and passports for the crew?

Can't remember the first time (Caen) that well but all documents were presented anyway. It was a Beneteau I think that the owner had from new. In Cherbourg the only two things they were interested in at first in were passports and the "invoice" as the Douanier called it. He checked that and noted that the VAT had been paid as one of the checks. He then wanted to see the SSR - unfortunately the owner, normally a very methodical chap, had put the letter of acknowledgement (saying the SSR is on it's way) in his documentation folder, not the little plastic SSR itself. The Douanes spotted that straight away and wanted to see the actual SSR itself.

Cue 30 minutes of frantic searching in the face of being marched off to the cashpoint for €100. Eventually found the SSR under a saucepan!! They were very pleasant about the whole thing but we actually had singled up and the engines running when the came on to the pontoon. We had intended to head west to Alderney but it delayed us enough to miss the Race (went to St Vaast instead). This was a Targa 29 so cruising very expensively and bouncily at 25 knots