The eternal VAT question

Have you ever been asked to produce VAT documentation

  • Never

    Votes: 90 88.2%

  • once

    Votes: 8 7.8%

  • more than once

    Votes: 4 3.9%
  • Total voters
    102
I have yet to hear first hand, from anyone who was boarded and who didnt have a "original sales invoice" what actually happened. Tranona is right , that a private individual buying a vessel already in the EU cannot be held responsible for VAT. It is always the responsibility of the person to first place the vessel in use in the EU, ie either the importer or the builder/seller.
 
test

One of the people who feels at pains about not having a VAT-proof should sail into Roompot/Flushing or IJmuiden. Go through the formal procedures and see what happens.
Get a lawyer ready and secure funding from the people here that believe nothing will happen.

I will not comment on the UK waters and UK regulations, but one reason that so few people are grounded by customs is that people with doubtful paperwork simply do avoid continental countries that do not share the transactional view voiced here regularly.

(just to be clear, I perfectly understand and share the transactional concept, but the folks in the countries I sail in/out do not; also happy to pick a fight, but there is a reason why tehre is a public discussion in NL about cutting back the powers of the Dutch IR)

just my 2cts
 
I have a cunning plan to settle this once and for all.

If you would all provide funding for modest expenses, I shall roam all the ports of Europe in a small vessel and leave any proof of VAT payment I may have AT HOME!

(Yes, my daring knows no bounds!)

The matter should be settled in no time - or Belgium perhaps.
 
The poll is currently showing 11% have been asked for VAT documentation. High enough odds to suggest it would be a bad idea to act on the assumption that 'I'll never be asked', especially considering the financial penalties involved.
 
quaelgeist2 said:
One of the people who feels at pains about not having a VAT-proof should sail into Roompot/Flushing or IJmuiden. Go through the formal procedures and see what happens.
Get a lawyer ready and secure funding from the people here that believe nothing will happen.

I will not comment on the UK waters and UK regulations, but one reason that so few people are grounded by customs is that people with doubtful paperwork simply do avoid continental countries that do not share the transactional view voiced here regularly.

(just to be clear, I perfectly understand and share the transactional concept, but the folks in the countries I sail in/out do not; also happy to pick a fight, but there is a reason why tehre is a public discussion in NL about cutting back the powers of the Dutch IR)

just my 2cts
Click to expand...

If the Dutch are so strict about checking VAT status of boats crossing their borders do they do the same for cars, watches, jewellery, etc? What's so special about boats?
 
Cars have crossing the Dutch border have all come from Europe hence any VAT would be due to the other country.

Fundamentally EU import duties are payable in the country of first import, all you have to do is show that it wasn't Holland (or wherever).
 
I'm Irish and in the process of negotiating a boat purchase in the UK and have mentioned the dreaded VAT word to my seller. Its a private sale and he says that of course the VAT is paid and that he has a receipt. So far I haven't seen it because the sale is still under discussion.

I looked up the VAT situation on boats in Ireland and it appears that when a boat is more than 7.5m (which this one is) it must have some type of VAT receipt from the UK Revenue, not just from the dealer. Has anyone seen one of these? I'm a little wary because of dire warnings of customs checks on arrival in Ireland with the boat and since the boat was built in 2000 it has no derogation.

Is there anyone out there who has a UK Revenue VAT receipt for a boat and would it be possible for me to see a copy of it? At least if I know what it looks like I'll know what to look for. My understanding is this boat was not bought from a recognised British dealer so it is possible that VAT could not have been paid. The deal is good and so is the boat so walking away would be silly.
 
nmwalsh said:
I looked up the VAT situation on boats in Ireland and it appears that when a boat is more than 7.5m (which this one is) it must have some type of VAT receipt from the UK Revenue, not just from the dealer. Has anyone seen one of these? I'm a little wary because of dire warnings of customs checks on arrival in Ireland with the boat and since the boat was built in 2000 it has no derogation.


.
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No. HMRC can never issue any kind of receipt or confirmation of VAT payment UNLESS the boat was privately imported into the EU/UK when VAT is payable directly to HMRC and a receipt is issued. As you can imagine this applies in very few cases as the vast majority of boats were sold to private owners by builders or dealers (who may also be importers) The responsibility for collecting and accounting correctly for VAT lies with the original vendor, not the buyer. Any offence related to VAT on the transaction can only be committed by the vendor. There is no record of the transaction other than the receipt the purchaser holds and the file copy the vendor holds. However in law the vendor only needs to keep this (together with his records of filing his VAT return) for 6 years. If he goes out of business it can be even shorter than that. VAT is not accounted for directly against an individual boat but on the total transactions during the period of the return.

All transactions between private EU residents wherever they are located in the EU are not subject to VAT (jargon is chargeable events). Also any transaction is the responsibility of the state where the transaction takes place. So if the Bill of Sale is in UK then any responsibility for VAT matters is with HMRC, not the Irish authorities - even if you are resident in Ireland.

So, all you will have to show (if they ask, which they have no reason to because there is free movement of goods within the EU) is your Bill of Sale. The original invoice will be a bonus, but irrelevant. It would, of course be very different if you bought the boat outside the EU say from the Channel Islands.

Suggest if you want a plain English guide to the VAT rules you go to the rYA site which has a whole section on VAT. It is of course written for UK readers, but the VAT rules are EU wide.

Hope this helps.
 
snowleopard said:
The poll is currently showing 11% have been asked for VAT documentation. High enough odds to suggest it would be a bad idea to act on the assumption that 'I'll never be asked', especially considering the financial penalties involved.
Click to expand...

It is a mistake to get carried away with the information this poll provides. All it tells us is that roughly 10% of people who responded have been asked on at least one occasion to show evidence of VAT payment. Whilst this is useful in demonstrating that it is a relatively rare occurence it does not tell us there is a 10% chance that an individual might be asked for the same information. Nor does it tell us who asked for it, when, where and in what context. Nor does it tell us the outcome of the request. It might be useful if the individuals in the 10% gave us full details. We can then make a better assessment of the probability of it happening to us as individuals.

What do you think are the financial penalties? It is not an offence to fail to produce the document. Failure to produce it does not lead to a demand for VAT from any authority. That can only happen if HMRC can prove that a VAT offence has been committed, usually through a judgement in court if there is a dispute. As has been noted many times it is almost impossible for a private individual to commit a VAT offence unless he was responsible for private importation of a boat into the EU.
 
What happens when you sail abroad

Very timely discussion.
We are looking at a boat right now for which the present owner (3rd overall) has no original bill of sale showing VAT paid when the boat was bought new from Moodys in 1988.
He does have a bill of sale from Owner 2 to him, and of course if we bought it we would have a proper bill of sale too.
So as I understand it there is no problem in the UK - transaction is between two individuals in the UK.
I'm assuming here the vendor is an EU citizen.
But what happens when the French douaniers ask for proof and on finding none demand payment - as, at least anecdotally, they will.
Any ideas?
Graham
 
A bill of sale between two individuals is sufficent in my experience for french customs, if teh boat is registered in the another EU country so much the better.

On top of that the seller should give you a indemnity document, stating that the vessel is free from all emcumbrances, this is much more useful than a sales invoice as any customas can ignore any document if the preceive you are dodgy. However with an indemnity document you can sue the seller to recover any "possible" future unlikely claims)

The other beef I have is the term "proof of VAT", THERE IS NO SUCH DOCUMENT , god will this sink in. all any documents you have are merely to show that YOU ARE NOT THE IMPORTER. ( I rarely shout but the VAT thing is turning into alomost a regilous dscussion).Many document can go to showing that.

No one is suggesting going onto foreign ports without any documentation, but you dont need an original sales invoice ( unless you are the first buyer). evidence that the boat was in the EU before you bought it, is what you want.
Thats all I've ever been asked for including visiting Holland. ( and I have sailed all over the place and its all I've been asked for).

By the way the poll is meaningless, It should only include thoses people that have been specifically asked to provide VAT documentation only. and it should exclude new boats or non EU boats or personal imports, you simply dont know what people are saying "yes" to.
Equally we dont have the specific resports from people who were asked for VAT documents. I'm not talking about the "I handed over all my papers and everything was fine", IN every case I heard first hand there was a dodgy VAT problem, usually a CI boat being captained/owned by a EU tax resident. I have never heard yet of ANYONE with a second hand EU boat ( provately acquired)being asked to pay the VAT in another country.

( it would actually be illegal for a foreign VAT man to do that actually, the UK for example cant collect outstanding french VAT).
 
Last edited:
Sinc said:
Very timely discussion.
We are looking at a boat right now for which the present owner (3rd overall) has no original bill of sale showing VAT paid when the boat was bought new from Moodys in 1988.
He does have a bill of sale from Owner 2 to him, and of course if we bought it we would have a proper bill of sale too.
So as I understand it there is no problem in the UK - transaction is between two individuals in the UK.
I'm assuming here the vendor is an EU citizen.
But what happens when the French douaniers ask for proof and on finding none demand payment - as, at least anecdotally, they will.
Any ideas?
Graham
Click to expand...

Two points. Firstly if the boat was in the EU in 1994 then it is "deemed VAT paid" - a somehat odd status that only exists to satisfy the transition arrangements. Evidence such as bills for the period would be enough.

Secondly you will have a bill of sale that shows the transaction took place in the UK between two private citizens. This shows that any VAT issues are under HMRC. This should satisfy any foreign authorities.

You are in no different position from thousands of others and life goes on.

Just make sure you have your registration document, Bill of Sale, insurance VHF certificate and ICC (if appropriate).
 
Thanks to all. In the end she needed a new engine and so we decided to buy something else - with an original invoice as it happens.
 
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