VAT on self build

electrosys said:
The whole point of the exercise is to provide a means of demonstrating to the Customs and Excise that the boat has been self-built, and not purchased or imported. Purchased or imported vessels are subject to VAT, and some form of proof of that VAT payment may need to be shown in order to prevent the vessel being subject to VAT for a second time (it happens) as it passes in and out of EU waters.

However, if you are able to demonstrate to the satisfaction of the Customs and Excise that the vessel has been self-built, then they will issue a VAT-exemption certificate (which takes the place within the ship's papers of a VAT-paid certificate) which can then be shown to anyone who may subsequently query the VAT-status of that vessel.
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Imported Vessels are not subject to VAT. They are only subject to VAT if purchased from outside the EU. If you purchase a boat from a private individual you don't pay VAT. If you purchase one from a VAT registered company then the TRANSACTION would be subject to VAT. If you purchase a boat NEW from a dealer then the transaction will have a VAT element and you will have an invoice which shows VAT has been paid on the TRANSACTION. The HMRC do not keep records of anything. They will not have a copy of VAT on any boat bought or sold they just collect TAXES ;) (VAT)
 
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electrosys said:
Well - a bloody VAT receipt then .... which certifies that you've paid VAT ... some of you guys are so sodding pendatic.
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It is not about being pedantic, but getting the facts right.

There is no such thing as VAT status for a yacht except in the very narrow sense that the term was used in the transfer arrangements when VAT went EU wide to cover boats where VAT would have been paid prior to 1985 but receipts were not available. All owners of such boats had to show was that the boat was in the EU on the qualifying date in 1992. It is also the case that for a while HMRC issued letters confirming this where owners were able to produce the evidence. However, this practice was discontinued many years ago.

As I (and others) have explained, VAT is a transaction tax, not an asset tax, so an offence (failing to account for VAT) can only be committed when a transaction takes place. So, if the OP has paid VAT on any purchases which were a "chargeable event" then he has nothing to worry about.

BTW the only time HMRC issue a VAT receipt is when the transaction is a private import and the importer pays VAT directly. Otherwise, HMRC have no idea whether VAT has been accounted for correctly on a boat as the only evidence of the transaction is the receipt from the VAT registered trader. While this shows that the purchaser has paid VAT is does not prove that it has been accounted for correctly - only an investigation into the traders VAT records will show that. Given that records are only kept for 6 years - and the chances are that the trader is out of business anyway, finding "proof" is difficult.

This does not mean that there are not VAT avoidance scams, some legal like the way I bought my boat, some illegal and others dubious, but in general they don't involve "ordinary" people, but rather VAT registered traders (who may also be private individuals) or where the boat is owned outside the EU but used within the EU.
 
Tranona said:
BTW the only time HMRC issue a VAT receipt is when the transaction is a private import and the importer pays VAT directly.
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...and (as Tranona won't need informing) even the presence of such a receipt is no proof of VAT 'status': the VAT may subsequently have been claimed back, the boat may have been exported and re-imported. This is one reason the issue is such a can of worms. In the context of boats VAT is a clumsy, inappropriate vehicle, but cheap to collect (because vendors effectively become tax collectors). The Excise, naturally enough, would like the best of both worlds. The Excise can kiss my transom (oh, how I wish...).
 
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