VAT paid status

[Guest]

I'm sure this subject has been discussed before on this forum but I hope someone can find time to offer me some guidance. I have been told that it may be required on occasions to prove the VAT paid status of your boat e.g. if requested by French or other customs. Is this the case? It would seem that evidencing VAT paid status for second hand boats may be difficult. I am currently going through the preliminary stages of buying a 17 year old boat, of which I would become the third owner. Is it therefore essential that I have evidence of the VAT paid status for the vessel? If the vendor cannot furnish that evidence should I go ahead with the purchase? What options are open to him or me to obtain satisfactory documentation? What future risks, if any, would I run if I proceed with the purchase without evidence of the VAT status?

Any advice on the subject would be gratefully received.

 

[Lady_Patricia]

The only info you need is from the first owner. A VAT reciept or copy of the reciept from them maybe sufficient if it includes the VAt number of the initial vendor.

I have had this problem when selling, however the brokers sorted it all out..

Best of luck

 

[Chris_Stannard]

If the documentation is mucky and difficult for the French Customs to comprehend, go to your local Customs and Excise Office, with all the bits and pieces you can get your hands on, and ask them to go through it and issue you with a certificate saying all relevant EU taxes have been paid. If you are buying and in doubt the seller or the broker should do thisfor you. If they cannot get a certificate, do not proceed if you are thinking of going abroad. It is not worth the risk.

Chris Stannard

 

[Guest]

Phone +44 1534 727281

Definitely to your advantage!

 

[Guest]

Chris

Thanks for the advice.

 

[AndrewB]

Its the seller\'s problem, don\'t make it yours.

A boat built after Dec 1984 that is worth £4,000 or more must have proof of its VAT-paid status. Otherwise you are liable at any time. Even if Customs never catch up with you (and that means not sailing abroad) you'll face exactly the same hassle when you try to sell.

Tell the seller to provide evidence of ONE of the following:
- The original VAT invoice;
- Documentary proof the yacht was in use before 1985 and was in the EU on 31st Dec 1992;
- Documentation from Customs that they regard the yacht as VAT paid.

If he cannot supply any of these, then buy the boat on a VAT-unpaid basis, i.e. for 17½% less. Then you would be advised to contact Customs to sort it out.

 

[pugwash]

What about older boats?

Does that mean an older boat -- like mine, built 1969 -- needs no docuemntation apart from the registration certificate showing her date of build? is there anything else I'd need?

 

[halcyon]

Re: What about older boats?

Is not life getting complicated, our Halcyon 27 was build 1972 we think, but there is no hull number, sail number or build crtificate, plus she was possibly the other side of the Atlantic Dec 92 !

 

[tcm]

Re: VAT paid \"proof\"

A vat invoice shows that VAT was charged. But in the UK at least, THE VAT IS ALMOST ALWAYS PAID AT THE START...but it can be reclaimed, and a cheque is issued by HMC&E. There is no link between the original vat invoice, the certificate (if any) and the reclaiming of VAT, nor demand for return of any invoice.

An official-looking document can be typed out, signed, dated, stamped and countersigned (by yourself) to confirm that VAT has definitely definetely been paid. Italians and French love these things. They mean nothing at all, and do not actually need to mention if the VAT has been reclaimed, but they do win "vat-paid status" even on boats which have reclaimed VAT. French, Italian and UK VAT office do not communicate meaningfully, even amongst offices of the same country.

 

[Guest]

Re: What about older boats?

U.K. Guide for Yachts
Not including Channel Islands, Malta or Gibraltar

VESSELS PURCHASED / ACQUIRED WITHIN THE EC

U.K. residents should only use a boat in the Community if it is VAT paid, or ‘deemed’ VAT paid. Documentary evidence supporting this should be carried at all times.

Documentary evidence might include :
· Original invoice or receipt
· Evidence that VAT was paid at importation
· Invoices for materials used in the construction of a ‘Home-Built’ vessel
(We recommend you carry 10 or so for major components - Hull, Engine, etc.)

A registration document on its own does not prove the VAT status of a vessel as there is no link in this country between the registry of the vessel and the payment of VAT.

Certain vessels which were in use as private pleasure craft before 1/1/1985 and were in the EC on 31/12/1992, may be ‘deemed’ VAT paid under the Single Market transitional arrangements.

Documentary evidence to support this could include:
For Age For Location at 31/12/92
* Marine Survey * Receipt for mooring
* Part 1 Registration * Receipt for Harbour Dues
* Insurance Documents * Dry dock records
* Builders Certificate

As Austria, Finland and Sweden joined the Single Market two years later, the relevant dates will be: in use before 1/1/1987 and moored in EC on 31/12/1994.

Other documents which could demonstrate VAT status might include:
· A customs receipt for charges paid (providing that no subsequent change of ownership has taken place whilst the vessel was outside the EC – see para. 30 of Notice 8);
· Evidence that Returned Goods Relief (RGR) has been granted;
· Evidence that Transfer of Residence Relief (TOR) has been granted
(Subject to the one year restriction on disposal).

In the absence of any of the above, whilst cruising within the EC you should carry a Bill of sale (between two private individuals in the UK). Whilst this is not conclusive proof that Vat has been paid, it does indicate that Tax status is the responsibility of UK Customs. It is also advisable to contact the relevant authorities in the Member State, or their Embassy in the UK, to confirm what documentation will be require in advance of your voyage.

VESSELS PURCHASED / ACQUIRED OUTSIDE THE EC

ANY yacht purchased outside the EC will be liable for Import Duty and VAT, regardless of age or previous tax history unless the importer is entitled to relief from charges (See Notice 3). Charges become due at the first port of call in the EC

BUYING A NEW VESSEL IN THE EC TO TAKE TO ANOTHER EC MEMBER STATE.

Yachts within the definition of “New Means of Transport” (NMT) purchased in one EC member state for removal to another, are liable to VAT in the country of destination (See VAT notice 728).

BUYING A NEW VESSEL IN THE EC FOR EXPORT OUTSIDE THE EC

You can purchase a vessel tax free if you intend to export it, under it’s own power to a destination outside the EC. Further details can be found in VAT leaflet 703/3/98.

VOYAGES OUTSIDE THE EC

If you are going directly to a country outside the EC i.e. Channel Islands, Malta and Gibraltar etc Part 1 of form C1331 should be completed and lodged with Customs prior to departure.
On return to the UK you should report your arrival as detailed in Notice 8.

 

[AndrewB]

That was exactly my situation.

A yacht built in UK in 1983, no record of VAT status, which was in Australia on the 31st Dec 1992.

We got the seller to contact UK Customs before we bought. He could prove the yacht was built in the UK and kept there for some years after, so there was no reason to suppose VAT had not been paid. Customs kindly provided a formal letter saying that on the basis of this evidence they are prepared to regard our yacht as VAT-paid in the UK (with certain conditions relating to Returned Goods Relief).

I have been quizzed twice in France and once in Portugal about the yacht's VAT status. There has been no problem once I've shown their Customs the original UK bill of sale with the date prior to 1985, though, like you, there is actually nothing to link that to the yacht other than the same name. I've not been asked to provide a translation of UK Customs letter.

 

[PeterGibbs]

You either get hold of the origianl sales docket showing VAT paid or that the boat was first sold in the EEC (as it then was) before VAT was imposed; check the date but I think it was 1983. Even so if it predates the VAy imposition and has been exported from the EU and later reimported, and no VAT paid then, you would still be liable.

If you cannot get hold of any such documentation and buy the boat you will not sleep well since a C & E challenge from any EU nation cannot be rebutted and you will be charged the going rate. There and then, or the boat impounded - this is nice revenue for EU countries and it is as well to take it seriously. They do.

PWG