VAT and boats - Indemnity Insurance??

mooninthemist

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I am hoping to buy an old barge, built in 1897 and converted to residential use in 1985.

Unfortunately there is no VAT history, this being a probate sale.

I've spoken to Customs and Excise and they tell me that in order to fall within the deemed VAT paid provisions, I need evidence that the vessel was in European waters as at 31 December 1992. This evidence is not available.

I wonder whether anyone has come across Indemnity Insurance to cover this type of problem?

Thanks

Roland
 

CLP

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Never heard of insurance which would cover VAT liability. If it was in residential use in 1985 it must have been moored somewhere since and if you can find an old mooring receipt or boat yard receipt, that should be enought to satisfy the VAT man
 

PeterGibbs

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Interesting one. I would think it not difficult simply on inspection to show any interested C & E official that the boat was built before the cutoff date for VAT, 1985. A surveyor's report should contained professional comment on the deduced age and provenance of the vessel. There will be plates on the boat, old pictures, the design itself, condition of timbers and frames etc. Any mooring invoices or repairs dated prior to 1985 etc will all count in making the case. It's not just a case of having an original bill of sale, nice as that is. On this count alone I doubt any official would even begin to take an interest in your boat.

The December 1992 cutoff date is intended to exclude vessels built abroad. It also catches those built in the EU and taken abroad before VAT applied, on re-importation VAT having to be paid, based on a current market value, not necessarily what the owner paid for it, plus importation costs (presumed) and any upgrading work.

But the conversion is more modern and in itself could be of interest. Done in the UK or at least the EU? Being more modern there will be construction invoices or some such showing that the work was done in the EU with EU labour and materials, so VAT paid. If the vessel is of such construction that sailing it out of the EU would be perilous so out of the question, it is easier to presume it never left the jurisdiction - one is entitled to use presumption in case of doubt. And as time marches on the trail becomes ever harder to establish: these are not grounds for C & E just bunging you a VAT bill on the chance that you are liable.

This is the reasoning I would employ. As you have discovered, getting the C & E to issue some note of satisfaction is virtually impossible. However, submitting your situation in writing to the C & E and having it acknowledged is, again, some use in establishing your good intentions vis a vis VAT status.

I have never heard of insurance cover for this situation, but I would be suprised if you had any significant exposure to challenge whilst owning the vessel. On sale, a pernickety purchaser might shy off, but I doubt it.

Ther are lots of old vessels around - Thames barges etc. A chat with an owner might illuminate your situation, should you still feel exposed.

PWG
 

mooninthemist

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Thanks very much for the useful replies. Unfortunately there is absolutely nothing prior to 1992, and the vessel has almost certainly been only in holland and the uk. Probably a statutory declaration from the present owner will be enough. Thanks for your detailed replies.
 

jwilson

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If it is 1897 built as you say you need some history/evidence to show her existence as a vessel before 1972 - the introduction of VAT - and for her thus to be totally to be VAT exempt.

Conversion in 1985 should not affect her VAT exempt status. Customs are wrong if they refer to the 1985/1992 'deemed paid' proviions - she should simply be VAT exempt by virtue of her age.

Ask a different Customs officer - you should get a different answer.

I don't know of any standard policy that will cover claims for VAT: you might be able to arrange it specially, but the premium might be silly.
 

Gunfleet

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This is an issue upon which the RYA could be more active in representing us. Why should HMRC be so hopeless at supporting tax paying British citizens? The same issue comes up over and over and they don't feel any need to regularise their advice, leave alone issue some form of certificate. Does anyone else remember the concordat they reached a few years ago with the CA and RYA, under which yachtsmen agreed to assist customs where possible? Well, what about a sign of good faith from HMRC?
 

bluedragon

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[ QUOTE ]
If it is 1897 built as you say you need some history/evidence to show her existence as a vessel before 1972 - the introduction of VAT - and for her thus to be totally to be VAT exempt.

[/ QUOTE ]

My thoughts as well. My yacht was built in 1969. The UK was not part of the EEC as it was then and VAT did not exist. So there should be no issue. It's not a matter of VAT being deemed paid...it could not have been.
 
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