VAT paid status?

[z1ppy]

We are looking at a boat at the moment and need to try and clarify the options....

The boat was originally sold from new by a UK broker Ex VAT to the first owner in the channel islands (2007)

The boat was bought back to UK and sold privately to the current owner (UK Private individual) without VAT being declared or paid by either the seller, nor the buyer.(2017)

The boat is now for sale in the UK by the private individual (not through a broker) and saying the boat will be sold with VAT paid status with them declaring the original purchase and paying VAT on that transaction level.

Couple of questions....

Assume if the seller pays the tax through the self declaration programme and gets confirmation of VAT being paid, it will constitute official evidence of tax paid status?

is it possible / legal for two private individuals to transact the EX Vat boat leaving me with the ability to declare the transaction and pay VAT in the UK to render the boat VAT Paid?

ownership trail is not in question, (its on its second owner now) but the VAT paid status is causing my brain to hurt.

thanks

 

[[165042]]

It sounds like the VAT should have been paid when it entered the UK in 2017 and subsequently is potentially open to seizure by HMRC?

 

[MapisM]

The boat was bought back to UK and sold privately to the current owner (UK Private individual) without VAT being declared or paid by either the seller, not the buyer.

Blimey, this previous transaction (albeit now history) sounds dodgy for good, I reckon... :ambivalence:
Not sure about if and how that can affect a new sale, though.
Some folks much more expert than myself on UK/HMRC rules will soon be around to address your doubts!

 

[CLB]

It may not be possible, but I would much prefer to buy the boat ex VAT and then arrange to pay the VAT myself. That way you know it has been done and you have the bit of paper that proves it. Basically, the boat sound like an illegal import at the moment and I suspect could be treated as smuggled goods.

 

[Tranona]

It is the responsibility of the person who imported the boat to pay VAT. This is presumably the current seller. On the basis of what you say he has broken the law by not declaring it and it is illegal to sell the boat in the UK.

It is therefore up to him to declare the boat and pay VAT. he will then get a receipt from HMRC which is proof of VAT paid. That will be the only proof as HMRC does not keep permanent records.

He can then legally offer the boat for sale.

 

[jfm]

It is the responsibility of the person who imported the boat to pay VAT. This is presumably the current seller. On the basis of what you say he has broken the law by not declaring it and it is illegal to sell the boat in the UK.

It is therefore up to him to declare the boat and pay VAT. he will then get a receipt from HMRC which is proof of VAT paid. That will be the only proof as HMRC does not keep permanent records.

He can then legally offer the boat for sale.

Boat was smuggled into uk. It seems by first owner, possibly with collusion of second, I can't tell from your post. Sarabande concludes above that 2nd owner is importer but I don't get that from your post.

First owner is history. He won't be declaring the boat, I guess. Second owner could try going to hmrc to pay (based in 2nd hand value when he bought it) and get the pink receipt, but he won't want to because he will get a penalty if he colluded. If either owner 1or2 pays, the boat would be VAT paid.

I would not buy the boat as is, if I were you. You know it's smuggled (you've posted it on ybw) and it is too dodgy now for you to buy it as you might be accused of a laundry/ proceeds of crime offence. Plus, the boat is mortgaged to hmrc for the VaT and while they don't generally invoke the mortgage for innocent buyers they might in the case of someone who knows the history.

Current owner has a bit of a problem to fix...

 

[jrudge]

I wonder if Hmrc offer any amnesty for voluntary disclosure ?

Not the op problem but owner number 2. Probably not as they are usually vicious with the vat!

He is being a little nieve. I would have thought he would either

A take it to jersey to sell as vat not paid. This “ un smuggles “ the Boat ( after a fashion )

B. Paid the vat before selling.

He wants his cake and eat it. Continue to use in uk on the punt a non vat elligle buyer will come along or retrospectively pay the vat which will most likely be on today’s value not that paid ( regardless of what he claims !)

The whole vat thing is a bit lax given the sole record is an old receipt from a company that in some cases has ceased trading so I am sure there is far more of it going on that we know ( or talk ) of.

 

[superheat6k]

Not quite the process I followed, although very very tempting !!!

A quick change of name, or two, move around a few marinas and 'sell' it to your brother, then his mate, who provides a VAT invoice (insert year of build) from his dot matrix printer, then back to you, and hey presto !

Did I say this ? Well yes as I do have a legit VAT paid certificate for mine ! Not a difficult con, but perhaps not one to discuss openly on here, and for Zippy why does he need to buy a dodgy status boat.

 

[z1ppy]

Thanks all. Reconfirmed my thoughts.

For us, no transaction without absolute proof of vat paid status. I actually have no doubt the current owner is undertaking this now regardless of our desire to proceed or not.

At no point since we have been speaking with the vendor have they said anything different..

 

[CLB]

If the process can be achieved correctly, buying an ex VAT boat and paying the VAT is probably the best way to ensure you have proper VAT paid proof. All of the boats I have ever owned have had a mixture of paperwork ranging from nothing at all, through to photocopies of original bills of sale. I have never had what I would consider 'absolute' proof of VAT paid status on any of my boats.

 

[ari]

Take it to jersey to sell as vat not paid. This “ un smuggles “ the Boat ( after a fashion )

That would seem to be the obvious answer. Seller takes it there, you buy it, you now have an ex VAT boat in an ex VAT area. Sail the boat back, contact customs, you've bought an ex VAT boat from the CI, can you pay the VAT please?

Previous history not your concern surely? It wasn't your boat then (you could buy any ex VAT boat in the CI with no knowledge that it had spent a week, a month or a decade in the UK at any time).

 

[jrudge]

True. Snag is the op does now know the history.

 

[jfm]

True. Snag is the op does now know the history.

Yes, and that's a big snag, from multiple angles. Assuming you prefer the outsides of jails to the insides.

 

[ari]

If I go to Jersey and buy an Ex VAT boat, return it to the UK, declare it and pay the VAT all in the appropriate and legal way, what is my crime?

Even if I knew that the previous owner had previously had it in the UK ex VAT and shouldn't have, how have I broken the law (particularly to the extent that is likely to see me in jail)?

Genuine question, not trying to disagree for the sake of it, I'm honestly curious about what crime I've committed if I buy an ex VAT boat and import it, paying the VAT as per regulations, just because I know that the previous owner broke the law with it.

To put it another way, if I buy a car from someone who I know has done 100mph up a motorway in it, am I guilty of speeding, or is he?

 

[Nigelpickin]

If I go to Jersey and buy an Ex VAT boat, return it to the UK, declare it and pay the VAT all in the appropriate and legal way, what is my crime?

Even if I knew that the previous owner had previously had it in the UK ex VAT and shouldn't have, how have I broken the law (particularly to the extent that is likely to see me in jail)?

Genuine question, not trying to disagree for the sake of it, I'm honestly curious about what crime I've committed if I buy an ex VAT boat and import it, paying the VAT as per regulations, just because I know that the previous owner broke the law with it.

To put it another way, if I buy a car from someone who I know has done 100mph up a motorway in it, am I guilty of speeding, or is he?

The speeding car example is not appropriate - receiving stolen goods would be closer....

 

[CLB]

The speeding car example is not appropriate - receiving stolen goods would be closer....

What! How on earth is the scenario above like receiving stolen goods?

 

[hullabaloo]

receiving stolen goods would be closer....

WTF, stolen goods ? where did that come from ? its vat love not armed robbery !

buying a boat ex vat and then paying the vat in my eyes is doing that right thing . no prison no big deal and no stolen goods .

 

[ari]

The speeding car example is not appropriate - receiving stolen goods would be closer....

It's appropriate because the illegal activity is prior to me buying it. It has nothing to do with me whether I knew about it or not.

I can understand that if the boat is in the UK VAT free and I buy it, and go to HM Customs to pay the VAT there might be somer awkward questions (but even in that scenario, I'm still not sure how I've broken the law wanting to pay VAT on an ex VAT boat I've just bought).

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 (especially in the light of all the proof of VAT paid threads on here where we're constantly being told that an owner down the line should not be (and is not) responsible for the VAT responsibilities of the supplying dealer who should have paid the VAT originally).

Happy to be educated though.

 

[hullabaloo]

It's appropriate because the illegal activity is prior to me buying it. It has nothing to do with me whether I knew about it or not.

I can understand that if the boat is in the UK VAT free and I buy it, and go to HM Customs to pay the VAT there might be somer awkward questions (but even in that scenario, I'm still not sure how I've broken the law wanting to pay VAT on an ex VAT boat I've just bought).

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 (especially in the light of all the proof of VAT paid threads on here where we're constantly being told that an owner down the line should not be (and is not) responsible for the VAT responsibilities of the supplying dealer who should have paid the VAT originally).

Happy to be educated though.

:applause:

 

[MapisM]

I'm really struggling to understand why that would put me in jail

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...