VAT Again and not for the last time

[mainshiptom]

A boat I am looking at as this statment from the broker:

With regard to the vat, I have the paperwork and a copy of the exemption certificate, I have checked with our forwarding agents and with the vat office (got a reference No for the call) and they are all saying that there is no problem with vat because the boat will be passing between private individuals and the original owner who imported the boat kept it for more than 12 months before selling it.

Should I agree with that or drop 17.5% off the asking price?

Tom

 

[duncan]

if the vat office is confirming that they consider the boat vat paid then fine - it's what you will have to illustrate (as opposed to prove given previous threads) when you sell.

as already highlighted the vat office could well be responding to the liability, on sale, accruing to the seller - which is a completely different thing.

 

[rogerthebodger]

Just because the previous owner keept it in the UK for more than 12 months does not mean it is deemed to be VAT paid

If the previous owner who imported it has paid the VAT and Duty there will be a Customs Bill of Entry and it is that you need to prove VAT paid status in this case.

VAT will not be payable on your transaction as it is between private individuals you do need proof that VAT was paid by the previous owner as above

 

[ari]

[ QUOTE ]
and they are all saying that there is no problem with vat because the boat will be passing between private individuals and the original owner who imported the boat kept it for more than 12 months before selling it.


[/ QUOTE ]

Used to be the case before HM Customs moved the goalposts. /forums/images/graemlins/crazy.gif

 

[harveymae]

I would would get it in writing from the vat office not rely on just a ref no

 

[mainshiptom]

I agree ! I have asked the broker to provide the paper work! I am also not giving a deposit until I get the paper work, also gave a price that I would be happy to pay without the vat paid proof.

Tom

 

[DoubleVision]

Give Nigel Johns at the BMIF a call (not sure of the number now but the RYA will be happy to supply it). He got me out of a very tricky VAT problem with an unscrupulouse broker a few years ago who tried to charge me VAT on a part exchange I had without the original purchase certificate (Proof of VAT payment) The guy is the legal eagle for the RYA and I cannot speak highly enough of him

 

[jfm]

Looks VAT free, wehey

Ahhh, this is looking better. As a guess, it looks like they are claiming that there is VAT exemption under the so-called "Transfer of Residence Relief"

If a private citizen transfers his full time residence from outside the EU to a country in the EU, he is allowed to import all his personal possessions with him free of VAT. This can include his boat. I have no idea if this applies to your seller (did he move his personal residence and bring the boat into the UK then?) but from what the broker says this looks like their position.

See text of rules pasted below. Check it all and and get the paperwork, and check the timelines (6 month rule, 12 month rule). You need confirmation that the boat wasn't bought under a "scheme" by the current owner and you need proof (berthing fees etc) as to use in the preceding 6 months. If it is all ok, the boat is VAT free. Make sure it checks out 100% paperworkwise, becuase you will have this same mallarky when you come to sell the boat. In fact, discount it a bit anyway, cos of the hassle...

A couple more points:
(1) be very careful about info given to you by HM Customs people. This stuff is VERY complex and the smartest tax experts do not work in HMRC call centres, they work in the City earning £1m++. Just cos the call centre person says something, that doesn't make it right. Likewise info from any experts. You need important stuff in writing from HMRC.
(2) Beware of HMRC confirmations that have been given to someone else. HMRC can wriggle out of them later on the grounds (a) incorrect info was supplied by the questioner and (b) the info isn't addressed to you so you are not entitled to rely on it.

Anyway, this looks good. Good luck.



COPY OF PERSONAL IMPORT RULES
Quote.....
If you are moving your normal home from a non-EU country to an EU country, including the UK, you may import your vessel free of customs duty and VAT providing you:

have lived outside the EU for a continuous period of at least 12 months; and
have possessed and used the vessel outside the EU for at least 6 months prior to importation; and
did not get the vessel under a duty/tax free scheme (see below); and
declare the vessel to our officer; and
will keep the vessel in the EU for private use; and
do not sell, lend, hire out or otherwise dispose of the vessel in the EU within 12 months of importation unless you notify us first and pay duty and VAT on disposal.
If you purchased the vessel under a duty/tax free scheme in the vessel’s country of origin or departure, relief from customs duty and VAT will only apply if at the time you got the vessel you were:

a diplomat;
a member of an officially recognised international organisation;
a member of NATO or UK forces, or the civilian staff accompanying them, or the spouse of such a member; or
you can prove that duty and tax has subsequently been paid and has not been, nor will be, refunded.
Our officer will give you the form we require on your arrival. You should be ready to produce the vessel and all evidence of use and possession outside the EU such as registration papers and berthing fees. The rules regarding your ‘normal home ’ are complex. If you are in any doubt, please contact our National Advice Service or any of the offices listed in Section 7.

If you do not arrive with the vessel yourself, we will not normally release it until you arrive. However, we may release it for storage under certain conditions. You should contact us for details of these arrangements.

UNQUOTE