VAT paid status?

[rafiki_]

Wow.

Went home last night exhausted with the boat search and considering taking up knitting as a hobby. Sat on the patio drinking cold beer and putting the world to rights. didnt bother looking at my phone and started today a fresh.

Come on here and it has moved along a fair bit! i wasnt expecting this.

I will of course not be mentioning any names so you can all rest easy, nor will i be entertaining any purchase until such time the owner has resolved the VAT status, something he has told me he is doing with detail and time frame so we will see. i have absolutely no reason to doubt what he says and i am also sure that what has transpired is not an intention to defraud, rather a function of circumstances. This of course does not change the fact..

If we still decide to proceed (and its a big if) then it will make an interesting purchase of what is a very nice boat but that has been loved and cared for by its current owner and is in tip top condition. when the paperwork is sorted it will make us or someone else a great VAT paid boat but not until then for me!

i guess the problem with being an island nation is there is so much coastline to "smuggle" and seeing a boat come in to Lymington could just as easily be from the Channel Islands, France or Yarmouth.

Howard, good call on the cold beer and chillax. I'm not entering any discussion on VAT and smuggling as it is way out of my knowledge zone, but merely wish you all the best for a great outcome, and looking forward to hooking up somewhere in the Solent :encouragement:

 

[scubaman]

TI is enshrined in EU law as a principle but the implementation varies a lot, especially question of applying vs self-deciding. In UK you must apply for it up front.

Not wishing drift too much but the harbour masters in North African Marinas must be rubbing their hands together...

 

[superheat6k]

As an aside here from and someone who has been through the legitimate process of paying the VAT on a CI import, one thing I was informed by the RYA legal department and contrary to Customs Notice 8 is that if a EU VAT paid boat is outside the EU in the CI for > 3 years it does not lose its VAT status if owned by a private citizen.

I was looking at another Corvette that claimed such VAT paid status despite having been in Jersey for ~ 10 years, plus the owner, as CI citizen, had occasionally visited EU ports, thus maintaining its VAT paid status.

I voiced my disagreement with the advice of the RYA and the owner's / broker's same view, but could not anyway agree a price and I ended up buying Boadicea, than a clearly non VAT paid never boat. I certainly did not fancy my chances of proving VAT paid status on some previous owners occasional forays to Cherbourg.

I was advised by the Small Craft Unit that I had a reasonable time to make my declaration, submit my purchase invoice, etc, for VAT assessment, subject also to making the proper arrival declaration to Dover HMRC. I was advised in this regard a reasonable time was a matter of 2-3 weeks, i.e. allowing sufficient time for formal documents from the broker to arrive.

 

[z1ppy]

OK, time to update this.

The boat in question has now had its VAT paid and have a receipt of payment from HMRC to confirm EU Vat status for that specific boat and hull number...

VAT was paid by the previous owner who was then able to sell the boat as a UK VAT paid vessel without issue...

I have also verified this process with HMRC (sometime its fortunate being in that business) and they have confirmed that all in order for that specific boat.

the process itself was pretty painless and has resulted in the confirmation of VAT paid status we were looking for.

 

[superheat6k]

OK, time to update this.

The boat in question has now had its VAT paid and have a receipt of payment from HMRC to confirm EU Vat status for that specific boat and hull number...

VAT was paid by the previous owner who was then able to sell the boat as a UK VAT paid vessel without issue...

I have also verified this process with HMRC (sometime its fortunate being in that business) and they have confirmed that all in order for that specific boat.

the process itself was pretty painless and has resulted in the confirmation of VAT paid status we were looking for.

Possibly not so painless for the previous owner though !!!

 

[petem]

Possibly not so painless for the previous owner though !!!

Trevor, how come you're selling your boat?

 

[Nigelpickin]

OK, time to update this.

The boat in question has now had its VAT paid and have a receipt of payment from HMRC to confirm EU Vat status for that specific boat and hull number...

VAT was paid by the previous owner who was then able to sell the boat as a UK VAT paid vessel without issue...

I have also verified this process with HMRC (sometime its fortunate being in that business) and they have confirmed that all in order for that specific boat.

the process itself was pretty painless and has resulted in the confirmation of VAT paid status we were looking for.

Sounds like a good result, thanks for the update.

 

[[165042]]

Was there a penalty for late payment or didn't HMRC care that it had been used over here for a few years?

Presumably it was 20% of the purchase cost when bought by the previous owner?

 

[derekbland]

I am really pleased you got this sorted.

Slight aside but same general theme. If the original VAT invoice had been lost but the VAT invoice from the previous owner was produced, would this, in the eyes of you guys be sufficient? If this was proved to be forged in any way then it would be a crime and I'm pretty sure it would be classed as False Accounting.

 

[Portofino]

I am really pleased you got this sorted.

Slight aside but same general theme. If the original VAT invoice had been lost but the VAT invoice from the previous owner was produced, would this, in the eyes of you guys be sufficient? If this was proved to be forged in any way then it would be a crime and I'm pretty sure it would be classed as False Accounting.

There’s not enough clarity here .
The P.O. would need to be a trader or a VAT reg,d boat owning entity like a hire Co ( charter ) where by they claim back input - to have the need to raise a VAT invoice.

Private individual to private individual, which I think want you mean ?- require no VAT involvement.

VAT is transaction tax ,in certain well defined circumstances- not a tax on the boat every time it’s changes title / ownership .
That’s why the ordinal bos from the builder is important assuming it’s to a PVT individual and then over the years passed on ,and on from from PVT person to another ,as the ownership individuals change
Assuming it’s not exported for more than 3 ? Years or ever owned by a VAT reg,d entity for example charter/ rent / hire or other business.

Here the boat was exported to outside the VAT Eu zone the CI then ( with a delay ) reimported and according to Zippy VAT levied and paid and there’s a paper trail now showing VAT has been accounted so it’s ok to use in the EU , well at least the U.K. for now - buts let’s not drift into post Brexit territory .



Forged= crime , how vigorously it’s persued I guess could vary ,but don,t go there imho

 

[derekbland]

There’s not enough clarity here .
The P.O. would need to be a trader or a VAT reg,d boat owning entity like a hire Co ( charter ) where by they claim back input - to have the need to raise a VAT invoice.

Private individual to private individual, which I think want you mean ?- require no VAT involvement.

VAT is transaction tax ,in certain well defined circumstances- not a tax on the boat every time it’s changes title / ownership .
That’s why the ordinal bos from the builder is important assuming it’s to a PVT individual and then over the years passed on ,and on from from PVT person to another .
Assuming it’s not exported for more than 3 ? Years or ever owned by a VAT reg,d entity for example charter/ rent / hire or other business.

Forged= crime , how vigorously it’s persued I guess could vary ,but don,t go there imho

Thanks for the input. To clarify, what I am told is that the original sale was from a broker since deceased. Second owner put it through his business and I understand VAT was paid. He apparently still has the document and I await confirmation that the document exists. The other option is that the current owner signs an indemnity which has been suggested by a solicitor.

Cheers


Derek

 

[CLB]

Thanks for the input. To clarify, what I am told is that the original sale was from a broker since deceased. Second owner put it through his business and I understand VAT was paid. He apparently still has the document and I await confirmation that the document exists. The other option is that the current owner signs an indemnity which has been suggested by a solicitor.

Cheers


Derek

The second owner putting it through his business would concern me. One of the reasons for doing this would be so that he could claim the VAT back, assuming there was VAT on the sale from the first owner to the second, which it sounds like there was as he appears to have proof of that. My thoughts are that he should then have charged VAT on the sale to the third owner. (are you looking to buy from the third owner?) If this happened, then this invoice should be good for proof of VAT IMHO. If this did not happen, then there is the possibility that the boat is VAT unpaid. All supposition, of course, but better to be safe than sorry. JFM is more clued up on this sort of thing, and my guess is that he would require more info before making a comment.

 

[derekbland]

The second owner putting it through his business would concern me. One of the reasons for doing this would be so that he could claim the VAT back, assuming there was VAT on the sale from the first owner to the second, which it sounds like there was as he appears to have proof of that. My thoughts are that he should then have charged VAT on the sale to the third owner. (are you looking to buy from the third owner?) If this happened, then this invoice should be good for proof of VAT IMHO. If this did not happen, then there is the possibility that the boat is VAT unpaid. All supposition, of course, but better to be safe than sorry. JFM is more clued up on this sort of thing, and my guess is that he would require more info before making a comment.

I will check again but my understanding is that owner 2 put it through the business and that the business paid the tax as opposed to the individual paying the tax. Again I will check.

I claimed the VAT back on my second boat many years ago by setting up a charter company, mainly getting business for other owners of charter boats and so acting as a middle man. Vatman wanted convincing and so whilst I was waiting for the boat, I advertised in MBM as it was back then and already had my first sales invoice which I duly sent off. I then had to pay back the proportion of tax to the VAT man when I then sold the boat. The business more than paid for all costs, including my use of the boat. One customer who asked me to arrange a 3-day corporate event in the Solent two years running then asked me to source something on the river Thames for a company conference. I found an imitation paddle steamer I think it was called the New Orleans in Henley. Anyhoo, was fun while I had the boat. One owner did try to sue me though. I had 3 boats chartered for the eclipse day. One of the clients went to where the boat should have been and then had to move on to another marina. The boat then had engine faults and so they were unable to use the boat. I refunded the customer the money as he did not get the service he had booked but the original owner threatened to sue. After several colourful exchanges over the phone and by email, I essentially said, "see you in court". Guess what happened?

 

[derekbland]

Trying to get a little more info I phoned the UK Ships register peeps. A very helpful chap told me that the boat is still on the Part 1 reg but can't give me details unless I pay the £21 fee, I might do this. It is also on the SSR with the current owner. He says that the previous owner should have de-registered it as it should not be on both registers. He believed this to be nothing more than an oversight.

Whilst neither of the above points prove VAT was paid, it makes me feel somewhat more happy with the history etc. Lets hope the VAT invoice turns up from the previous owner.

I still think it crazy that there is no compulsory systems as with registering your car that shows the history and seems only to rely on all paperwork being handed down, unless of course it has been part 1 registered from owner to owner.

BTW. I have seen different descriptions of the SSR reg on here and the guy I spoke to says the simplest way to think of it is as a passport for the boat.

 

[Tranona]

BTW. I have seen different descriptions of the SSR reg on here and the guy I spoke to says the simplest way to think of it is as a passport for the boat.

In this context an SSR is meaningless. The key difference from Part 1 is that it is not a register of title. all it does is identify the boat as a British ship as the (self declared) owner is qualified to own a British Ship.

As to your VAT issue "putting through the business" is a rather loose term. what you are looking for is a VAT invoice for the last sale that was a chargeable event. usually this is just from the builder or dealer to a private owner. However if the sale is to a VAT registered entity and the boat is for business use, VAT can be reclaimed as an input. When the business sells it then it charges VAT on the sale price and if the buyer is a private person then that invoice is his evidence of proper VAT payment, not the ones from the dealer to the first owner. The buyer should, of course get the BofS for both changes in ownership to show clear title.

 

[derekbland]

In this context an SSR is meaningless. The key difference from Part 1 is that it is not a register of title. all it does is identify the boat as a British ship as the (self declared) owner is qualified to own a British Ship.

As to your VAT issue "putting through the business" is a rather loose term. what you are looking for is a VAT invoice for the last sale that was a chargeable event. usually this is just from the builder or dealer to a private owner. However if the sale is to a VAT registered entity and the boat is for business use, VAT can be reclaimed as an input. When the business sells it then it charges VAT on the sale price and if the buyer is a private person then that invoice is his evidence of proper VAT payment, not the ones from the dealer to the first owner. The buyer should, of course get the BofS for both changes in ownership to show clear title.

I do understand all of the VAT points made in previous posts, I was simply mentioning how the guy explained the SSR. I am waiting for the VAT receipt to be produced along with other docs and then will make a decision.

 

[superheat6k]

Trevor, how come you're selling your boat?

Simply getting insufficient use presently and this will likely be the case this year and next. We have a significant birthday and cruise next month and a significant anniversary next year with another cruise booked then (SWMBO doesn't know about next month's and was pestering, so we booked the one next year - oh the webs we weave ! ).

So that means my principal holidays are set for large ship cruises and I am incredibly busy at work, and two mid teenage daughters also have other things to do most weekends.

I have been asked to remain in my role for the Corvette Motorboat Association running the website, so will be keeping my hand in, and will definitely be considering a later model 320, although I will also be looking at other traders / trawlers around the 40' area, such as Grandbanks, Tarquin, etc. Probably due a couple of seasons out anyway, and I may use this time to try a cruiser charter in the Med.

Had an offer close to my desired price today, so might be boatless sooner than I imagined.