VAT reality

[rogerthebodger]

Try arguing that in Spain......................

Ok so what could the Spanish authorities do legally and the operative word is legally as intimidation is unlawful on most civilised countries.

 

[BrianH]

Ok so what could the Spanish authorities do legally and the operative word is legally as intimidation is unlawful on most civilised countries.

It matters not what is correct, a confrontational official - and I have met some when declaring in - can ruin your day. As the above proves, VAT can be a complex subject and a lower-level functionary may well have been poorly briefed from above when instructed to check for VAT-paid documentation in a language not his own.

 

[rogerthebodger]

VAT can be a complex subject and a lower-level functionary may well have been poorly briefed from above when instructed to check for VAT-paid documentation in a language not his own.

Oh yes I know all about dealing with the type of people you talk about having lived in and traveled through numerous parts of rural Africa for over 30 years.

The language issue is another issue I have had to deal with and not european languages either

 

[Tranona]

As the offence is not "accounting for the VAT on a VATable transaction" the offender is the person of VAT registered organisation that has caused the offence and not the boat involved in the offence so how legally can the VAT man arrest the boat as it has no part in the non accounting for the VAT raised due to the transaction.

Well, the example (a boat being re-imported from Turkey) I quoted brings in yet another little nasty in the legislation - at least in the UK and probably in other states.

The VAT on importation is not strictly VAT but is effectively an import duty. To ensure that it does not give importers an advantage over domestic producers it is set at the same rate as VAT. The act of importation is therefore treated as a "chargeable event". This of course introduces another problem in establishing a base for applying the rate so the law talks about value as the import may not be accompanied by a commercial invoice so each transaction is the subject of an individual calculation. This can, though often work to the advantage of the importer as the agreed value may well be lower than the boat cost him, but could be higher, if for example he had expensive work carried out just prior to importation. As with import duties, the boat cannot be released until the tax is paid.

So, that answers your question. If customs can hold the boat until the tax is paid, they are within their rights to hold the boat if at a subsequent date it is discovered that there is outstanding VAT -ie the boat has not been declared and the tax paid. The liability still stays with the importing individual and the first line of argument by the current owner would be that he has a Bill of Sale stating the boat is free of all encumbrances. I would imagine HMRC would be sympathetic to this argument, but other authorities may not.

That is the risk you take when buying a boat with a questionable history, particularly if it has been out of the EU, and inevitably the risk is higher if you are buying a bluewater cruising boat that has been around for a few years. Much less a risk - and almost non existent, buying a boat like the OPs!

 

[rogerthebodger]

The VAT on importation is not strictly VAT but is effectively an import duty. To ensure that it does not give importers an advantage over domestic producers it is set at the same rate as VAT.


Thats interesting, not I'm not a fully informed as UK C&E but "normally" VAT is charged both on local supplied goods and direct imported goods ( any kind) and if a local supplied product has an Excise duty like alcohol and tobacco the imported alcohol and tobacco will have a advorlium duty which is the same as the excise duty with VAT added on top of that.

Now in my view proof of VAT payment is nyon impossible as VAT can be reclaimed back after purchase and issue of a TAX involved. When I visit the UK and buy goods in person I have to pay UK VAT and get a UK VAT invoice for the goods. Now on leaving the I can get Customs at the airport or sea port to endorse a customs document , can't remember the number, that the I have removed the goods from the UK and authorising the supplied to refund the VAT by me sending the customs form back upon which the supplied "should: refund me. This leaves me with a UK supplier invoice indicating the VAT has been paid on those goods.

Also when a VAT registered supplier sells any goods it must by law supply a VAT invoice and if the entity that the invoice was in the mane of is also VAT registered it can claim the VAT back if it is part of its normal business, but the owner of that business could pay for that boat in his own right and claim the VAT back in the name of the company. This is of cause tax evasion and unless the authorities do an ardit in time this will not be picked up and if the company's business is similar to the produce it may never be picked up. and the boat has a tax invoice where the VAT has been reclaimed.

The point about purchasing a boat in Turkey and shipping it to the EU makes the import a taxable event is true but any one with a little knowledge would arrange the boat to be transported to the EU and the transaction take place there. Infact transporting the boat is not really necessary, it just the place of issue of the documents (Bill of sale)

Many loop holes which is why their is such confusion on both side of the fence IMHO.

So if I was in the situation of having to prove my UK boat (if I had one) was VAT paid I would shoe the Bill of sale and the location at which the bill of sale was signed by both parties and state if VAT was applicable it is the responsibility of the country in which the transaction took place to account VAT not the local country I was visiting at the time.

In the case of my own boat I would get to know time limit for temporary import and ensure I cleared out before that time expired and the minimum time I must be out of the country before I can return which in the EU is very little as I understand.

People also need to understand the country of registration and import status in a country do not necessary have a relationship. I could register my boat in the UK part 1 and still have my boat in South Africa and if I then sailed my boat to the UK and wished to keep it in the UK permanently I would still have to pay ant import duty and VAT applicable and if I wished to return to South Africa I would get a document from RSA customs registering the boat for re import free of duty and VAT.

 

[Tranona]

Now in my view proof of VAT payment is nyon impossible as VAT can be reclaimed back after purchase and issue of a TAX involved. When I visit the UK and buy goods in person I have to pay UK VAT and get a UK VAT invoice for the goods. Now on leaving the I can get Customs at the airport or sea port to endorse a customs document , can't remember the number, that the I have removed the goods from the UK and authorising the supplied to refund the VAT by me sending the customs form back upon which the supplied "should: refund me. This leaves me with a UK supplier invoice indicating the VAT has been paid on those goods.


The point about purchasing a boat in Turkey and shipping it to the EU makes the import a taxable event is true but any one with a little knowledge would arrange the boat to be transported to the EU and the transaction take place there. Infact transporting the boat is not really necessary, it just the place of issue of the documents (Bill of sale)

Many loop holes which is why their is such confusion on both side of the fence IMHO.

That system is irrelevant for boats. You cannot reclaim VAT on second hand boats and for new boats the personal export scheme is much more robust placing the onus on the seller to ensure the boat is physically exported within the time limit. He is responsible for VAT until then. So the buyer will need to indemnify the seller, for example through a bank guarantee.

It is not clear that just having the documents in the EU would be acceptable. The advice is to sail the boat to Greece, get a receipt for a marina or mooring bill and the Bill of Sale stamped by the port police - this is a legal requirement in Greece and costs 4 euros! The seller and buyer have to be there to sign. Belt and braces.

Fortunately none of this complexity affects the vast majority of boat owners or their transactions.

 

[GrahamM376]

I suspect Princess are being a little precious. 'Data protection' is often cited when companies/individuals don't actually know what they're at liberty to do so take an ultra-cautious approach. They should at least be able to provide a copy with the first purchaser's details blacked out*. I think that if the original records are on paper, data protection doesn't apply, anyway. I'd take further advice.

Any proof of VAT from Princess is irrelevant as the sale in question was from Moody to the first purchaser. I purchased via Moody Brokerage and the paperwork trail doesn't have the original or copy of the original VAT invoice but there was a letter from Moody to a previous owner, stating that VAT had been paid by the original (unnamed) purchaser when new.

 

[macd]

You're right, of course, Graham. I'd assumed, evidently incorrectly, that Princess were the last VAT-registered entity in the chain. If they weren't, then of course whatever VAT they accounted for is irrelevant.