VAT not paid

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Tom41

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sorry if this is a repetitive question, I looked in the search and google but couldnt find a clear answer
I'm looking to buy a boat that is "vat not paid". I understand is because maybe it originated to channel island or similar.
but now is in the UK and being sold as second hand.
does it mean if i buy i need to pay the VAT of 20% ?

does it mean i canot travel with it say in EU?

many thanks
tom
 
Who is selling it in the UK? A VAT registered business that had the right to reclaim the VAT on the boat when they bought it? In theory they should be selling it with VAT added to make it VAT paid to you with a receipt to prove it.

If it is VAT free simply because it came from the CI, then it sounds like it is effectively a smuggled boat and should be avoided.

There are many reasons a boat could be for sale ex VAT, but if I were you I would be asking for exact details of why it has ex VAT status and go from there.
 
If really unmissable boat, get the current owner to take it back to the relevant Channel Island and consider buying there.

Not an expert, but should be able to take to EU (assuming you are not an EU resident) for up to 18 months without paying EU VAT.

If bring to the UK as a UK resident, you would have to pay 20% UK VAT. That doesn’t change the EU bit above.
 
Unlikely it is a "smuggled" boat if it is in use in the UK already for 2 reasons. Firstly the owner (or whoever brought it to the UK) should have paid VAT on entry. Second, if VAT has not been paid the "offender" is unlikely to advertise the fact because an offence has already been committed. Either way it is the seller/importer who is liable to pay the VAT.

Much more likely as already suggested, the seller is a VAT registered trader and he will charge VAT on top of the agreed price. It could be a commercially used boat or owned in relation to the seller's business. It is advertised without VAT because it could be sold to another VAT registered trader who can reclaim the VAT or be exported.

A private buyer should be extra wary and do due diligence on the provenance before making any offer.

Should perhaps add that there are some rare circumstances where a non VAT paid boat is in the UK legally, for example one owned by a non resident and here under temporary import rules, or held in bond under the HMRC scheme operating in conjunction with some brokers.
 
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Tranona said:
Unlikely it is a "smuggled" boat if it is in use in the UK already for 2 reasons. Firstly the owner (or whoever brought it to the UK) should have paid VAT on entry. Second, if VAT has not been paid the "offender" is unlikely to advertise the fact because an offence has already been committed. Either way it is the seller/importer who is liable to pay the VAT.
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Plenty of boats sailed from the CI into the UK without being declared, but your second point makes much sense. You wouldn't then advertise it as such unless you were a bit silly. Possible, of course, but not likely unless the seller is unaware of the intricacies of such boats and somehow thinks its a selling point.
 
i have bought loads of boats over the years, usually with a couple of grand in a Tesco bag for a boat in someones garden.
all these boats were classed as vat not paid, because nobody had seen a vat receipt for them in years. One of those old boats is still in Greece where i kept it for 10 years, deemed vat paid, as it was older than 1992, and i eventually sold it on to an ex-pat brit for a carrier bag full of euros. I gave him a handwritten receipt and the ssr certificate.

i bought a yacht last month, through a broker for the first time, and because it was a 40 year bargain basement boat, that had no vat papers either.
the lack of vat paid status could just be lost paperwork, nothing more.

if it is a private or brokerage sale, it will not attract vat, but if it is being sold 2nd hand by a vat registered dealer as part of their business stock, then there will be vat to pay.

no vat paperwork is more problematic in extended trips to the EU, but just visiting, with a UK bill of sale and proof of where the boat was on brexit transition 31/12/20, like a marina invoice, shows the tax is a matter for hmrc, not the EU.
 
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Dellquay13 said:
i have bought loads of boats over the years, usually with a couple of grand in a Tesco bag for a boat in someones garden.
all these boats were classed as vat not paid, because nobody had seen a vat receipt for them in years. One of those old boats is still in Greece where i kept it for 10 years, deemed vat paid, as it was older than 1992, and i eventually sold it on to an ex-pat brit for a carrier bag full of euros. I gave him a handwritten receipt and the ssr certificate.

i bought a yacht last month, through a broker for the first time, and because it was a 40 year bargain basement boat, that had no vat papers either.
the lack of vat paid status could just be lost paperwork, nothing more.

if it is a private or brokerage sale, it will not attract vat, but if it is being sold 2nd hand by a vat registered dealer as part of their business stock, then there will be vat to pay.

no vat paperwork is more problematic in extended trips to the EU, but just visiting, with a UK bill of sale and proof of where the boat was on brexit transition 31/12/20, like a marina invoice, shows the tax is a matter for hmrc, not the EU.
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You are perhaps misunderstanding the issue. While as you say there are many boats without any evidence of payment of VAT, even though it is obvious that VAT has been paid when sold to the first owner. This is NOT the same as advertising a boat as VAT unpaid. This is specifically advising that VAT has to be paid on the sale for reasons explained earlier.
 
Tranona said:
You are perhaps misunderstanding the issue. While as you say there are many boats without any evidence of payment of VAT, even though it is obvious that VAT has been paid when sold to the first owner. This is NOT the same as advertising a boat as VAT unpaid. This is specifically advising that VAT has to be paid on the sale for reasons explained earlier.
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I bought my yacht last month and the brokerage advert clearly stated vat not paid, the broker explained he had to put that because he had no proof vat had been paid.
he is the manager at a large uk marina, and i got a MCA registered bill of sale, along with the evidence of location at brexit, so i have no reason to doubt his word on the vat status. Whatever was paid back in 1980, he had no record so sold it vat not paid.
 
Does the same seller have any other boats for sale, i.e. could it be as simple as they advertise their boats not inc. VAT and then add it at point of sale? No idea why they'd do that but...
 
V1701 said:
Does the same seller have any other boats for sale, i.e. could it be as simple as they advertise their boats not inc. VAT and then add it at point of sale? No idea why they'd do that but...
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it was a brokerage sale of 2nd hand goods on behalf of the private owner, the broker only took a % cut for the listing service from the sellers receipts, and no vat was involved.
just like buying off eBay really, the broker gets a cut for bringing a buyer to the seller.
if the broker doesn't see proof of the original vat receipt, he can't state it has been paid.
 
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Dellquay13 said:
it was a brokerage sale of 2nd hand goods on behalf of the private owner, the broker only took a % cut for the listing service from the sellers receipts, and no vat was involved.
just like buying off eBay really, the broker gets a cut for bringing a buyer to the seller.
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I was asking whether the OP's seller has any other boats for sale...
 
Dellquay13 said:
I bought my yacht last month and the brokerage advert clearly stated vat not paid, the broker explained he had to put that because he had no proof vat had been paid.
he is the manager at a large uk marina, and i got a MCA registered bill of sale, along with the evidence of location at brexit, so i have no reason to doubt his word on the vat status. Whatever was paid back in 1980, he had no record so sold it vat not paid.
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Yes, but all that is rather irrelevant as a 1980 boat is "deemed VAT paid" under the 1992 transition rules if it was in the UK on 31/12/1992, so no further evidence required. All this is ancient history and Brexit has no effect on it other than the boat no longer enjoys free circulation in the EU. did the actual advertised price say VAT unpaid, implying that VAT was payable in addition or was there a note in the particulars saying no evidence available which many brokers add (completely unnecessarily) to cover their backs. The MCA BoS is also irrelevant as is registration of your title on Part 1 as that just shows transfer of title and nothing to do with VAT.
 
Tranona said:
You are perhaps misunderstanding the issue. While as you say there are many boats without any evidence of payment of VAT, even though it is obvious that VAT has been paid when sold to the first owner. This is NOT the same as advertising a boat as VAT unpaid. This is specifically advising that VAT has to be paid on the sale for reasons explained earlier.
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As above though, it might have originated in the CIs. If that were the case then the importer would owe the VAT rather than it being due upon sale. I guess in theory the owner could have temporarily imported it. Complex stuff VAT!
 
Tom41 said:
sorry if this is a repetitive question, I looked in the search and google but couldnt find a clear answer
I'm looking to buy a boat that is "vat not paid". I understand is because maybe it originated to channel island or similar.
but now is in the UK and being sold as second hand.
does it mean if i buy i need to pay the VAT of 20% ?

does it mean i canot travel with it say in EU?

many thanks
tom
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Can you elaborate a little more on why the boat is VAT not paid ?

If it is a case of a CI boat that some idiot thought he would sort it out later, I would run rather than walk away !

BTW I have imported a CI boat and been through the process of actually paying the UK VAT due when I imported it.
 
thanks for all the answers. sorry if it was a bit confusing. although i have seen a number of boats explicitely advertised as 'vat not paid'. this one is a bit different. it didnt have info on vat first anywhere (so I assumed was the same situation). then after viewing it im provided with what it seems to be a proof of selling from the broker in 2014. the boat is 85. this paper says the price at the time as 'vat inclusive' and a foot note saying 'EU VAT not paid'. this is the first boat for me that im looking to buy. i dont even know what documents is 'a must' having. do a private needs to give me some form ? is the boat owner to be registered in a public record? sorry for the i understand extremely basic questions... and thanks
 
OK a 1985 boat is what is known as "deemed VAT paid" under the 1992 EU common VAT transition rules. That is you do not have to show documentary evidence of actual payment. which usually is in the form of the original invoice from the builders. Does not mean VAT was not paid but in those days keeping such evidence was not required. The bit about EU VAT not paid reflects the post 31/12/2020 situation when UK VAT paid boats ceased to have free circulation in the EU so if sold for use there would have to pay VAT in the EU. Does not prevent you sailing to the EU as the boat can be admitted temporarily for up to 18 months.

What you have described is a pretty standard description of the status of 10s of thousands of boats in the UK. The biggest concern in buying a secondhand boat is getting clear title. You need to see as much documented history of past ownership as you can, but the essential is evidence that the seller has clear title to sell. This usually takes the form of a Bill of Sale from the previous owner to the current one, but hopefully there will be more. If you are buying through a broker he will have done some due diligence on the seller and the boat to satisfy himself that he could handle the transaction. When you finally pay for the boat you will get a Bill of Sale which transfers the title to you, plus all the back documentation. The broker should explain all this to you - that is what he is paid for.

There is no public or compulsory register of boats, the buying and selling relies on straightforward law of contract, hence the importance of having a written record of the transfer of title. It is possible to register title with the Registrar of Shipping on what is known as the Part1 register, but the process is aimed at ships rather than yachts, so most people don't bother.

Might be worth buying this book which explains the whole process

rya.org.uk/shop/Pages/products.aspx?product=rya-boat-buyers-handbook-ebook
 
Thanks alot @Tranona. I think the record of previous ownership is what worries me as this is a private not a broker. between privates I assume then is a simple piece of paper with address and both signatures ("a contract"?) anyway I'll enquiry more. many thanks
 
You can download a Bill of Sale form from the RYA site or the MCA site, Also a model contract if you want to go though the whole process. However if it a low value boat and you get a good story supporting the seller's ownership, for example several years mooring fees, insurance, yacht club ownership etc the risk is low.
 
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