jonic
Well-Known Member
AKA Fraud but I take your point.
The poor system and lack of appetite to provide a solution from the powers that be do not help.
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VAT and Bill of Sale ?
- Thread starter davei
- Start date
AKA Fraud but I take your point.
The poor system and lack of appetite to provide a solution from the powers that be do not help.
zambant
Well-Known Member
Fraud - forged instrument - 10 years !
Hi Jonic - glad to see you in this one - it does not surprise me.
Davei - do your self a favour - offer them 20% less to take account of the VAT - if you purchase the boat then go spend some money with jonic - he is worth it and REALLY knows his stuff.
John
Steve N
Member
Thats the problem - the owner does not have the original VAT receipt - even though he purchased it from new
He can request a "duplicate receipt" from HMRC. That's what we have.
It should have the hull number of the boat on it, a transaction number and date stamp.
zambant
Well-Known Member
I would love to know how that one works please?
What address do I write to please? because one of those will save me a possible bill of £8,000
pm if you would prefer
John
Steve N
Member
I would love to know how that one works please?
What address do I write to please? because one of those will save me a possible bill of £8,000
pm if you would prefer
John
Hi John.
The receipt was provided by the broker along with the rest of the ships papers.
The address for HMRC on the receipt is:
Freight Clearance Centre
Lord Warden Square
Western Docks
Dover
Kent
CT17 9DN
If you have the hull number, why not give HMRC a call (01304 664171) and see what they can tell you?
I suggest you also contact Moody and tell them your position. They should be able to confirm whether the VAT was paid on purchase or whether the buyer elected to pay HMRC directly.
When we bought our boat we found that the Hallberg Rassy brokers were very candid about this sort of thing too so you could try talking to the agent/broker that the yacht was originally purchased through too.
Hope this helps you.
Steve.
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jonic
Well-Known Member
This sounds like it will only work for VAT paid on a direct import not for a boat purchased through a dealer who would have filled quarterly VAT returns.
Tranona
Well-Known Member
Clear this one up. HMRC no longer do this and have not done for many years. They are very clear that the only acceptable document is the original commercial invoice. Even with boats that are privately imported and VAT is paid direct to HMRC they do not keep a copy. All that is explained in the FAQ sheet on the RYA site.
To the OP
You will be in no different position than literally thousands of other boat owners of older boats bought at a time when VAT receipts were irrelevant. Even now it is not an offence not to have one for your boat, there is no offence that you can commit, nor is there any powers that HMRC (or any other customs) have to demand any payment from you.
The "problems" as jonic has alluded to arise if a boat spends any time out of the EU and is imported, if it was exported under the VAT free scheme and re-imported, if it was sold outside the EU and re-imported. In those cases VAT may be due on re-importation and it is the responsibility of the individual importing the boat to pay the VAT, not subsequent owners - although the slight sting in the tail is that HMRC can apply to the courts for a charge over the boat in respect of unpaid VAT. There seems to be little evidence that they actually do this.
So, you have nothing to worry about. You are buying from the person who bought from Moodys so there is no way he can have avoided paying VAT. You will have his declaration on the Bill of Sale saying the boat is free of charges. You are in a much better position than most people buying a 25 year old boat because you have a very clear trail. As to the likelihood of having trouble going abroad, you can just about forget it. All the evidence from personal reports to a big survey by the RYA suggest that officials are not in the least bit interested in old privately owned boats.
As jonic says, however, the mechanisms are there for foreign officials to challenge boats and indeed to collect VAT on behalf of other states. However they will have to prove that an offence has been committed and there is a clear VAT liability. As you cannot commit such an offence you will not be troubled.
Most VAT offences are related to either corporate ownership where the corporate entity has to account for VAT, leasing schemes that are designed to reduce VAT liability and offshore ownership where the boat is used in the EU. Clearly these are not the sorts of things that many private individuals get involved with unless they are very wealthy and have an incentive to minimise their tax liability while retaining private usage of their boat. Such people tend to have lawyers and accountants to deal with the authorities. Customs have a constant battle with such people as boats are very mobile and owners tend to operate internationally. In addition schemes that are legal in some states are not legal in others. For example I bought my boat through a scheme in Greece that had the effect of reducing my VAT payment by 50%. Perfectly legal in Greece - I have written confirmation plus a statement of how the VAT was calculated and a receipt to show I have paid it. It (the scheme) would probably not be accepted by HMRC, but they would accept my receipt and Bill of Sale because it was all in Greece where they have no jurisdiction.
As I have said many times here, VAT is a tax on transactions, not on boats. An offence can only be committed in relation to a transaction that is a chargeable event, and it is the responsibility of the vendor to account for it correctly. The difficulties arise because the intentions of the EU Directive are impossible to implement. They made a "special case" for boats because of the potential for evasion and hoped that requiring proof would help enforce VAT collection. However they "forgot" that VAT was in existence in some countries long before 1992 and there was no requirement to keep any record of payment. To make matters worse (particularly from the UK point of view) boats do not have a unique recorded identity - indeed many boats have no unique identification at all, which makes it impossible to link any payment definitively to a specific boat. That is not the case in many other EU states where boats have to be registered and proof of VAT is a condition of registration.
So HMRC are between a rock and a hard spot. They need to keep up an illusion that VAT is a big issue whereas in reality they can do little to enforce carrying of evidence and nothing to collect payments from individuals except in those specific transaction where an individual is responsible (they make this clear in the RYA information referred to earlier). Neither they, nor officials in other states are stupid so don't waste their time unless they suspect an offence within their jurisdiction - there are plenty of those around to keep them busy!
So, long winded way of saying go ahead and buy the boat if it is what you want. If you want to check out the logic of what I am saying look at the RYA/HMRC FAQ sheet and HMRC VAT Notice no 8. In the latter you will discover more little wrinkles, but not ones that concern most ordinary boat owners.
wotayottie
Well-Known Member
This thread has now taken on the usual format - we've had exactly the same thread on several occasions so far. As usual, Tranona has appeared and told you the legal position as he understands it, and I have no reason to doubt what he says.
British newspapers sometimes report officials overstepping their powers, something that is then corrected in the courts. You can be sure that the same thing happens abroad. So the risk you face is that some official over there hasnt read the Tranona take on VAT documentation and takes it into this head to apply his own interpretation. You are left fighting a foreign official in a foreign language and stuck in a foreign port.
Do you want that? The chances of it happening are pretty small but do exist. And like it or not, the uncertainties you have now will be the same as a potential buyer would have when you come to sell the boat.
So it really comes down to your psyche. Are you a worrier or are you, as Tranona seems to be, someone who would relish a fight with foreign beurocracy? Are you worried about resale value? Can you be bothered to search out another boat you like but with better documentation? Up to you.
P.S. I suppose there is another alternative - have Tranona on a retainer to fight your corner in the unlikely event that you have a problem,
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Juniperskip
Well-Known Member
Good old Moody......
I have had two Moody's and an Elan from them - the paperwork was very poor even on a boat purchased in 2006! There is however an archive on site at Swanwick that might shed some light and 2 of the guys in the Ancasta brokerage are ex Moody so might be able to advise the art of the possible from that route...
I have had two Moody's and an Elan from them - the paperwork was very poor even on a boat purchased in 2006! There is however an archive on site at Swanwick that might shed some light and 2 of the guys in the Ancasta brokerage are ex Moody so might be able to advise the art of the possible from that route...
jwilson
Well-Known Member
You can sometimes get a duplicate receipt from HMRC, but only where VAT has been paid as a special individual transaction - ie when a boat with non VAT paid status has entered the country and VAT on that specific boat has been paid.
Unfortunately for the many thousands of people with boats that will genuinely be VAT paid, but where previous owners have lost the details, individual HMRC VAT receipts are very rare.
What usually happens is that the builder Bogstandard Yachts Ltd. sold a yacht in say 1975, and issued a receipt on their letterhead or receipt pad detailing price X plus VAT Y. Every so often Bogstandard Yachts Ltd pay the total amount of VAT they have collected, from several boats, to HMRC. They do not send HMRC a breakdown showing which yachts were VAT paid - just a total lump sum of VAT collected for the period, which would probably include several new boats sold, some refit work, etc. Only in the rare cases if HMRC did a VAT investigation on them would an exact breakdown of how the VAT was arrived at be in HMRCs files in any form - and even then it is probably now long lost.
A few yacht builders, where the company is still in existence, will issue letters saying that VAT would have been paid on yacht "Z", and that a tax authority may check their records if they require. A very few will provide a photocopy of their copy of the original VAT receipt. Most however will not do either of these things, or the company will have long since closed down.
A more fruitful line of enquiry for 1973-85 yachts can be location of said yacht at the end of 1992 - you can sometimes get yacht clubs and/or boatyards to issue letters saying that the yacht was at their boatyard/moorings that winter. Add in some form of evidence that the yacht was in use pre-85 and you have "deemed VAT paid" status.
One of the problems with dealing with HMRC over yacht VAT is that their original yacht department was disbanded, and no longer will issue letters stating that in their opinion yacht "Z" was VAT paid, along with a flimsy SAD88 form that is the actual document confirming VAT status.
Whilst there is a new pleasure craft unit, they will not normally deal with individual vessel cases, or deal directly with boat owners - they are supposed to deal only with organisations. Also, depending on who you talk to in HMRC and when, you can get very different answers. One constant however, is that unless a VAT chargeable event takes place (sale from a business, import into country etc) HMRC cannot just charge you VAT because you have a boat with no VAT paid proof - they have to prove that it was NOT paid - which they cannot do, as even if they trawled back through dusty, motheaten 30 year old files Bogstandard Yachts Ltd's VAT return only showed a total amount for several boats, not the names and hull numbers of those boats.
This does not help you however if you piss off a Customs official somewhere foreign, who can choose to make your life hell if his wife has just run off with the local wine-seller, his house roof fell in that morning, and has just had his own tax bill come in. In practice however, no-VAT-proof is very, very rarely a problem, even going foreign, as long as you are UK-registered.
The original poster appears to have a Moodys receipt, showing payment made in the standard rate not zero rate column, so it does appear that VAT would have been paid and that this is confirmation.
Tranona
Well-Known Member
Just to add a little bit more to jwilsons good explanation of the problems of dealing with HMRC.
The OPs lack of evidence is the same as HMRCs - in other words they have no way of knowing whether VAT has been correctly accounted for in the one and only transaction involving the boat so far. That is the original sale by Moodys. There is no obligation to keep records of VAT for more than 6 years, so even if Moodys were still in business they may not have the original invoice copy. However, some UK builders and their dealers, such as Fairline and Princess have kept records and can produce copies - so this might be the case with the Moody archive.
That still begs the question - why would HMRC (or any other authorities) be interested? They would only be interested if they had suspicions that there were irregularities in that one and only transaction, or they had reason to suspect that the seller had not accounted for VAT correctly in the period when the boat was sold. VAT is accounted for on a temporal basis and is unconnected to the goods sold except as identified on individual invoices - which in turn only have to show that the goods are correctly subject to tax. As has been pointed out several times, identification of boats is often very sloppy. Only since 1998 has there been a requirement to record the identity of boats through the HIN. Before that builders used all sorts of methods for record keeping - including no records. Add to this most builders are now out of business, so even the scanty records may be lost.
So, the chances of HMRC going back to 1988 and being able to find anything meaningful are just about zero - which is why they don't bother.
This leaves the myth about foreign officials. They have no jurisdiction over VAT matters on transactions that take place outside their state. When details do emerge of people and boats having difficulties it almost always comes down to concerns about a recent transaction involving the boat, use of the boat in the EU in contravention of the terms in which it is allowed to be used, or an import from outside the EU. Many of these problems occur in ports that are close to states that are outside the EU and therefore where non VAT paid boats operate or in recognised ports of entry from outside the EU. So Croatia/Italy, Greece/Turkey, France/Channel Islands and ports on the Atlantic seaboard are areas where it is logical to expect closer scrutiny of documents.
There is a long list of situations where there might be potential for concern, but it would not include a demonstrably UK owned private boat where the last transaction was between two private EU residents (ie not a chargeable event). This covers the vast majority of British boats, including the OPs if he buys it.
The final issue is the effect this myth has on boat values. This is difficult to determine and for most people because it only causes problems if a buyer is trying to get secured finance where the small number of finance houses who lend in this way will often not advance the full amount without seeing evidence of VAT payment. There is nothing that makes this a legal requirement, but the sorts of boats that they are often asked to finance are just the type that lend themselves to the more sophisticated VAT avoidance schemes so it is easier for them to limit their exposure by having a blanket rule. So, for some types of boat the market might be more limited without VAT evidence and therefore result in reduced value for the boat. However, this should not affect the vast majority of boats which are not bought with secured finance.
The OPs lack of evidence is the same as HMRCs - in other words they have no way of knowing whether VAT has been correctly accounted for in the one and only transaction involving the boat so far. That is the original sale by Moodys. There is no obligation to keep records of VAT for more than 6 years, so even if Moodys were still in business they may not have the original invoice copy. However, some UK builders and their dealers, such as Fairline and Princess have kept records and can produce copies - so this might be the case with the Moody archive.
That still begs the question - why would HMRC (or any other authorities) be interested? They would only be interested if they had suspicions that there were irregularities in that one and only transaction, or they had reason to suspect that the seller had not accounted for VAT correctly in the period when the boat was sold. VAT is accounted for on a temporal basis and is unconnected to the goods sold except as identified on individual invoices - which in turn only have to show that the goods are correctly subject to tax. As has been pointed out several times, identification of boats is often very sloppy. Only since 1998 has there been a requirement to record the identity of boats through the HIN. Before that builders used all sorts of methods for record keeping - including no records. Add to this most builders are now out of business, so even the scanty records may be lost.
So, the chances of HMRC going back to 1988 and being able to find anything meaningful are just about zero - which is why they don't bother.
This leaves the myth about foreign officials. They have no jurisdiction over VAT matters on transactions that take place outside their state. When details do emerge of people and boats having difficulties it almost always comes down to concerns about a recent transaction involving the boat, use of the boat in the EU in contravention of the terms in which it is allowed to be used, or an import from outside the EU. Many of these problems occur in ports that are close to states that are outside the EU and therefore where non VAT paid boats operate or in recognised ports of entry from outside the EU. So Croatia/Italy, Greece/Turkey, France/Channel Islands and ports on the Atlantic seaboard are areas where it is logical to expect closer scrutiny of documents.
There is a long list of situations where there might be potential for concern, but it would not include a demonstrably UK owned private boat where the last transaction was between two private EU residents (ie not a chargeable event). This covers the vast majority of British boats, including the OPs if he buys it.
The final issue is the effect this myth has on boat values. This is difficult to determine and for most people because it only causes problems if a buyer is trying to get secured finance where the small number of finance houses who lend in this way will often not advance the full amount without seeing evidence of VAT payment. There is nothing that makes this a legal requirement, but the sorts of boats that they are often asked to finance are just the type that lend themselves to the more sophisticated VAT avoidance schemes so it is easier for them to limit their exposure by having a blanket rule. So, for some types of boat the market might be more limited without VAT evidence and therefore result in reduced value for the boat. However, this should not affect the vast majority of boats which are not bought with secured finance.
Skysail
Well-Known Member
I have seen on the Moody Owners website that owners have tracked down certified copies of original documents, despite Moodys being out of business for some years.
http://www.moodyowners.net
Try the MOA InfoExchange 'Thinking of buying a Moody' board which is free to all.
http://www.moa.myzen.co.uk/cgi-bin/discus/discus.cgi
If you become a member you can search all the previous posts on the subject, might be worth £20, also for the help you would get in the future.
http://www.moodyowners.net
Try the MOA InfoExchange 'Thinking of buying a Moody' board which is free to all.
http://www.moa.myzen.co.uk/cgi-bin/discus/discus.cgi
If you become a member you can search all the previous posts on the subject, might be worth £20, also for the help you would get in the future.
Jim@sea
Well-Known Member
I bought a Brand New Moody around the same year. I tried to buy it direct but was told I had to buy it from one of their Agents and I ended up buying it off Marine Secol who were their Northern Agents. I still have the original invoice which clearly shows how much the boat was, the VAT figure, and the total. Obviously Invoiced Correctly.
But strangely enough when I sold it 2 years later nobody asked me for the original invoice nor has since.
I would wonder if the boat was actually sold by Moody directly as I thought that most of their boats were made by Marine Projects (like mine) and sold through agents.
But strangely enough when I sold it 2 years later nobody asked me for the original invoice nor has since.
I would wonder if the boat was actually sold by Moody directly as I thought that most of their boats were made by Marine Projects (like mine) and sold through agents.
GrahamM376
Well-Known Member
Thats the problem - the owner does not have the original VAT receipt - even though he purchased it from new
My original Moody invoice doesn't shaow VAT either although there is a VAT number on the letterhead. So far have never been asked for VAT proff but, if you're worried, scan it, OCR it and amend to show VAT amount which was paid at the time.
davei
New Member
Woah !! Well I guess I did ask....
UK customs are not a worry for me...
Its the unpredictabel foreign b******s that always worry me.
Thx all for your input - I now have a plan of attack -
dave
UK customs are not a worry for me...
Its the unpredictabel foreign b******s that always worry me.
Thx all for your input - I now have a plan of attack -
dave
Plevier
Well-Known Member
Sorry if someone has already made this point and I haven't noticed.
If the buyer is not VAT registered, there is no obligation on a supplier to provide an invoice showing VAT separately unless the buyer specifically asks for a full VAT invoice, in which case it must be provided.
So the original Moody invoice does meet the regulations if the original buyer was not VAT registered. You may consider it poor practice but Moody were not technically at fault.
sailorman
Well-Known Member
Woah !! Well I guess I did ask....
UK customs are not a worry for me...
Its the unpredictable foreign b******s that always worry me.
Thx all for your input - I now have a plan of attack -
dave
if you do not like the foreign B*****ds DONT GO THERE Simples
GrahamM376
Well-Known Member
As you say, a VAT inclusive invoice is OK in the UK but, unfortunately, as far as some countries are concerned VAT amount has to be shown so, they likely won't accept it's been paid. Provided no-one is attempting to cheat HMRC, I see no problem in making up an invoice to satisfy foreign officials, providing it's only a re-work of what the original total paid price was.
As far as Moody are concerned they no longer exist as a company, having been bought out by Premier so, it's highly unlikely a 20+ year old copy invoice is available.
Collett
New Member
If the boat is VAT paid there should be an invoice stating that fact. The Bill of Sale never does. For more info contact - info@ward-mckenzie.co.uk.
