VAT paid status?

[petem]

As I said previously, I'm no expert at all on UK-specific law, and I'm not sure if the fact that the boat was previously smuggled into the UK qualifies as a penal crime - though the fact that jfm mentioned jail makes me guess that it does.
Anyway, assuming that it does, the answer to your question above is quite simple, i.e. complicity.
Believe it or not (at least in some Countries - again, not sure about UK), knowing for sure of a crime made by someone else and not reporting it, even without any further involvement, is already enough to make you an accomplice...

Well, let's hope that the OP doesn't name the boat or we could all end up in prison !

 

[ari]

Well, let's hope that the OP doesn't name the boat or we could all end up in prison !

Quite!

 

[Portofino]

https://www.gov.uk/government/publi...ailing-your-pleasure-craft-to-and-from-the-uk

Just talks of “ penalties and interest “ for late payment / failure to pay .

Bit like a parking / speeding fine as a more accurate analogy.
Theoretically it’s possible to go to jail —- eventually after many exit routes being made available for many things like spitting on the pavement - if the perpetrator escalates it’s at every opportunity .

Its a transaction tax .
Unless he’s exempt see 3.15 ?
The current owner should pay it and is liable to “ penalties and interest “ if the boats still in the U.K.

If Zippy buys it in the CI and brings it to the UK then he pays the transaction tax VAT in the usual way .

I,can’t see it especially if it’s renamed in the CI ever coming under the UK radar while the VAT is processed , when it’s returned .

Aside see 6,1
Nowt to do with this , but thinking when I sailed from the Solent to the CI , just set off ( and returned or went to Fr ) never thought about notifying anybody other than coast guard .
Doc suggest somewhere ,that CI for all intents and purposes is none EU .
So there must be loads of UK boaters Heading to the CI , buts who’s asking ?

It’s an “offence “ if you have not notified HMRC -does not say what the punishment is .Sounds more nearer “ jail “

But with regards to late VAT it’s just a penalty + interest that’s all ,

 

[Nigelpickin]

Sorry guys, but if a boat has come into the U.K. without declaration and the required levies have not been paid, then its contraband. So of course if you then buy that boat, you are dealing with goods that should not be purchased. You can’t just tidy up the problem by catching up with the VAT and quite rightly so.

It’s pretty straight forward. Let the current owner sort the problem and stay well clear until such time as the boat has paid what it owes, don’t be complicit in a potentially serious offence.

*sorry, I’ve just read JFM’s post #6 - I hadn’t realised that he’d already covered this.

 

[Nigelpickin]

But if I say to the seller 'look, your boat is ex VAT in the UK, I can't buy it like that. Repatriate it to outside the EU so that I can legitimately buy an ex VAT boat ex EU and import it officially and properly', then I'm really struggling to understand why that would put me in jail

Happy to be educated though.

Ari, you would not be legitimately buying an ex VAT boat, you’d be knowingly trying to buy a boat that was smuggled into the U.K. it’s not something that can be tidied up by moving the boat and re setting the status, the owner needs to bite the bullet and hope that HMRC accept a payment with a fine.

 

[MapisM]

Well, let's hope that the OP doesn't name the boat or we could all end up in prison !

No worries there, P.
Since no names were named so far, we can just stop contributing to the thread and pretend we never read what followed... :encouragement:

 

[jfm]

Uk law isn't like many others mapism - with limited exceptions it is not an offence to not report a crime you know about. Nor is it generally an offence to walk on by when a crime is being committed.

#23 is a million miles from being correct.

In the particular case that zippy has described here the hypothetically suggest course of action would leave zippy substantially exposed to prosecution (with jail) under at least the following:

1. Criminal law act 1967 s.5. The point, for any legal technicians, being that zippy is part of a plan to buy the boat after its "re export" so his consideration is the boat (the fact that he also pays money for the boat doesn't absolve him).

2. Proceeds of crime act 2002 s.327 et seq. This is the killer. The boat is unquestionably "proceeds of crime" aka "criminal property" under uk law. Zippy, if executing this plan which he isn't going to, would be helping the 2nd owner launder it (by converting it to money or concealing the criminal nature of it). In fact the offence extends to "concealing or disguising its nature, source, location, disposition..." and to removing the property from the UK. Zippy would would be aiding or abetting the 2nd owner's commission of this offence by executing the plan as described, if not committing it himself, but the difference is academic: jail max 14 years either way.

Item 2 is much worse than 1. You might wriggle out of 1 but good luck with 2. I absolutely wasn't exaggerating when saying zippy shouldn't do this on pain of jail ( he isn't doing it, as he has already said -he ain't daft!)

 

[Lloydroberts]

I'd also like to add to jfm's post that any monies/property seized under laundering laws is dealt with in the civil courts where the burden of proof is far less(probability not beyond reasonable doubt) than the criminal courts therefore harder for the accused to prove his/her case.

That's my understanding of it...I could be wrong...it has been known.

 

[Hurricane]

Interesting thread.

@JFM
Is there a way that this situation can be sorted.
I appreciate that Zippy can't be involved but you did say that owner 2 could pay the import/VAT and then be liable for a fine.
Could owner 2 mitigate his costs/involvement by negotiating with hmrc?
With the aim of making the boat legally saleable in the UK.

 

[Portofino]

In the particular case that zippy has described here the hypothetically suggest course of action would leave zippy substantially exposed to prosecution (with jail) under at least the following:

1. Criminal law act 1967 s.5. The point, for any legal technicians, being that zippy is part of a plan to buy the boat after its "re export" so his consideration is the boat (the fact that he also pays money for the boat doesn't absolve him).

2. Proceeds of crime act 2002 s.327 et seq. This is the killer. The boat is unquestionably "proceeds of crime" aka "criminal property" under uk law. Zippy, if executing this plan which he isn't going to, would be helping the 2nd owner launder it (by converting it to money or concealing the criminal nature of it). In fact the offence extends to "concealing or disguising its nature, source, location, disposition..." and to removing the property from the UK. Zippy would would be aiding or abetting the 2nd owner's commission of this offence by executing the plan as described, if not committing it himself, but the difference is academic: jail max 14 years either way.

Item 2 is much worse than 1. You might wriggle out of 1 but good luck with 2. I absolutely wasn't exaggerating when saying zippy shouldn't do this on pain of jail ( he isn't doing it, as he has already said -he ain't daft!)

Thx - understood can see your No 2 logic .
Owner 2 ( unless exempt 3.15 which we don,t know ) is in a right pickle — hypothetically speaking .

Makes you wonder how many none VAT paid CI boats have strayed out of there waters into the EU for [ insert your time ] .While out of the CI no VAT has ever been paid for what ever reason, and then returned and then sold and then the next owner who arrived with it in the EU and processed the VAT in the usual way ?
This Next owner complete oblivious to the previous passage plans / duration it was out of the CI.

Reversing this how many UK VAT paid boaters have arrived at the CI and unknowingly committed an “ offence “ because they did not notify HMRC - returning [ insert your duration] later - say a summer hol cruise .
Perhaps a late change of plan - weather run to safe haven etc and the Mob was flat - assuming it’s just a call ?

 

[jfm]

Not easily enough to make it worthwhile for zippy imho. Policy behind current law is to make financial crime deeply unattractive, and part of that means not providing any easy way out of holes like this.

I don't know if owner2 has done anything wrong. He could disclose to hmrc and as regards tax get a smaller %penalty for self disclosure. So his vat bill might be say 150% of the original vat rather than 160%, say. Something along those lines. As regards criminal law he might get lighter treatment, e.g. CPS deciding not to prosecute (if he is lucky) or seek suspended sentence. But really there aren't enough facts to judge all this properly. And you can't negotiate penalties then reveal your identity. You have to put your head in lion's mouth then ask for mercy.

I'd expect that if zippy agrees to buy boat provided owner2 cleans it up, owner 2 might not clean it up as much as one would want. Financial crime is so much harder to deal with (in uk for sure, and in plenty of other places) than say 10 yrs ago, deliberately. Unless the boat is v special, I would walk away. I suspect zippy has already decided to do that.

 

[MapisM]

Makes you wonder how many none VAT paid CI boats have strayed out of there waters into the EU for [ insert your time ] .While out of the CI no VAT has ever been paid for what ever reason

In this case there's a simple reason, i.e. that VAT ain't legally due: as long as the boat is still owned by a CI resident, he/she can go anywhere in EU under temporary import regime, for up to 18 months in a row.
What makes the first transaction illegal no matter what is that the buyer was a UK resident private individual.

Reversing this how many UK VAT paid boaters have arrived at the CI and unknowingly committed an “ offence “ because they did not notify HMRC - returning [ insert your duration] later - say a summer hol cruise.

Not sure if a notification is required by some Coast Guard regulations, but other than that, from HMRC viewpoint there's nothing wrong with that.
I believe that also here there's a limit, but very long (3 years, IIRC?) after which the boat is considered "exported", hence requiring VAT to be paid again upon re-entrance in the EU, which is arguably unfair, but hey-ho! Otoh, if I should guess a total amount of VAT cashed in by all the EU Countries for these transactions, my bet would be pretty close to zero...

 

[MapisM]

Uk law isn't like many others mapism - with limited exceptions it is not an offence to not report a crime you know about. Nor is it generally an offence to walk on by when a crime is being committed.

Now, that's interesting. I'm a bit at a loss in understanding the rationale, particularly for the "nor..." case.
But trying to understand the rationale of each and every law is just wishful thinking, in my experience...

 

[jfm]

Thx - understood can see your No 2 logic .
Owner 2 ( unless exempt 3.15 which we don,t know ) is in a right pickle — hypothetically speaking .

Makes you wonder how many none VAT paid CI boats have strayed out of there waters into the EU for [ insert your time ] .While out of the CI no VAT has ever been paid for what ever reason, and then returned and then sold and then the next owner who arrived with it in the EU and processed the VAT in the usual way ?
This Next owner complete oblivious to the previous passage plans / duration it was out of the CI.

Reversing this how many UK VAT paid boaters have arrived at the CI and unknowingly committed an “ offence “ because they did not notify HMRC - returning [ insert your duration] later - say a summer hol cruise .
Perhaps a late change of plan - weather run to safe haven etc and the Mob was flat - assuming it’s just a call ?

Don't know what you're citing with 3.15.
Ref your second para, being oblivious changes a lot. The case in this thread is non oblivious. As I said, devil in detail.
The offence of not notifying hmrc in your last para is trivial and no penalty would be charged in that scenario. That's a million miles from the situation I'm talking about which is zippy being part of a plan to re export thr boat so it can be reimported with vat then paid. Chalk and cheese.

 

[Portofino]

Here see 3.15
https://www.gov.uk/government/publi...ailing-your-pleasure-craft-to-and-from-the-uk

And see my post #23 re 6.1
“nowt to do with this “
Separate odd issue I picked up on HMRC dealings

 

[scubaman]

Makes you wonder how many none VAT paid CI boats have strayed out of there waters into the EU for [ insert your time ] .While out of the CI no VAT has ever been paid for what ever reason, and then returned and then sold and then the next owner who arrived with it in the EU and processed the VAT in the usual way ?
This Next owner complete oblivious to the previous passage plans / duration it was out of the CI.

Afaik, this is only a problem if the original owner is UK (or EU) based, but I'd imagine that most CI non-VAT boats are owned by companies/individuals residing outside EU thus benefitting from 'temporary import'.

Reversing this how many UK VAT paid boaters have arrived at the CI and unknowingly committed an “ offence “ because they did not notify HMRC - returning [ insert your duration] later - say a summer hol cruise .
Perhaps a late change of plan - weather run to safe haven etc and the Mob was flat - assuming it’s just a call ?

Again afaik, unless they stay for more than three years, there is no need to inform HMRC.

Edit: Doh, I was too slow...

 

[Portofino]

Don't know what you're citing with 3.15.
Ref your second para, being oblivious changes a lot. The case in this thread is non oblivious. As I said, devil in detail.
The offence of not notifying hmrc in your last para is trivial and no penalty would be charged in that scenario. That's a million miles from the situation I'm talking about which is zippy being part of a plan to re export thr boat so it can be reimported with vat then paid. Chalk and cheese.

For clarity in my posts above ^^^ hypothetically there’s no Ti , I meant “strayed “ as in not really the intended path .
They’ve been in EU waters and VATs been ignored .
Just gotta hope the plotter has been wiped of stored waypoints ( destination s )

Not advocating Zippy gets involved as clearly see the allready made laundered point .btw .

 

[jfm]

Afaik, this is only a problem if the original owner is UK (or EU) based, but I'd imagine that most CI non-VAT boats are owned by companies/individuals residing outside EU thus benefitting from 'temporary import'.



Again afaik, unless they stay for more than three years, there is no need to inform HMRC.

Edit: Doh, I was too slow...

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.

 

[jfm]

Here see 3.15
https://www.gov.uk/government/publi...ailing-your-pleasure-craft-to-and-from-the-uk

Ok. Not sure how anyone was meant to guess.
To state what I hope is obvious, that's not law; it's merely hmrc's guidance note. For amateurs.

 

[z1ppy]

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.