VAT Some solutions?

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robbieg

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For anyone interested in the VAT questions that are frequently raised in the forum there is a decent article in July's MBY magazine. Seems to be well researched and wide ranging. On the point of whether your used boat can be seized by HMRC if you can't prove VAT is paid it concludes no unless it can be classified as "smuggled" ie. imported with no VAT paid-and in practice HMRC need some evidence of this. If sailing in UK waters this should mean proving VAT paid status is not the issue it has been hyped up to be.

If going overseas you could be asked for VAT paperwork and boats can be seized if it is suspected they are smuggled. However, in practice again SSR documents mainly satisfy the officals.

So VAT invoices not essential in the UK, good to have if going overseas but unlikely to be a disaster if you don't have one seems to be the message. Lots of other good stuff about importing from outside EEC, VAT avoidance schemes, chartering and VAT etc. Worth a read IMO.
 
Yes, this is a good summary of views that have been expressed on these fora, particulalry the MOBO one.

If only HMRC would accept this and alter their advice it would help many, particularly those who want to raise finance against a boat, but are unable to do so because the finance house insists on an unnecessary document in many cases.

However, this would mean HMRC admitting they are wrong and worse still surrendering what they see as power over individuals in a climate where their power is being eroded on one hand, but potentially being increased on the other by government. See the threads on yachts being boarded for no reason as an example.
 
As somebody with a boat built before VAT existed, owned and sold in the UK with a continuous history of British registry I still suffer the problem of many that i cannot prove exemption from VAT and have no VAT invoice. Why? Because I cannot prove the boat was in the UK on one particular day. The system is absolutely mad and R&C should do their public duty and set up a small unit to produce simple certificates of VAT exemption for those like me. Why? Because they are a public service body who should do what is right for the British public in order to secure our freedom in the EC that now rules our lives. Rant over.

Yoda
 
I really can't see what all the fuss is about.

No one has ever posted that they are being persued for VAT on an old boat. I think C & E would be keen to stop recent VAT reduction schemes like the boat leasing scheme (new boats only) available in France but do not seem interested in checking that any 1980's or 1990's boat were ever sold outside the EU thereby making them VAT eligible again. There is enough serious fraud going on with current businesses to keep the IR busy.

In reality I wonder how many boats in the UK do have any VAT due on them I suspect there will be a few but only a few.

Yes some jobsworths do like to see paperwork.

With the age of so many boats and the demise of so many distributors and companies in the marine industry I think I would make up my own Bill of Sale from a distributer that has long bit the dust, to a person who no longer lives at an adress that no longer exists. There is no great filling cabinet where the IR keeps copies of all Invoices either pre VAT or post VAT. If boat build does post date the VAT introduction stage I would try to get the VAT rate applied on any false invoice correct for that date!!

Have a reality check how many original receipts can you find from the 1990's?
 
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So VAT invoices not essential in the UK, good to have if going overseas but unlikely to be a disaster if you don't have one seems to be the message.

[/ QUOTE ] Better, if going overseas, is a bill of sale from one private individual to another in UK. This establishes that VAT is a UK customs matter, and not in the jurisdiction of the country you are visiting
 
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This establishes that VAT is a UK customs matter, and not in the jurisdiction of the country you are visiting

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So foreign revenue are then satisfied that tax on your boat is a UK matter.

What's to stop them then asking for a receipt for your wrist watch? Your oilies? Your shoes? What about your tender? Push bikes on board?

Obviously it's impossible to prove a negative but for countless obvious reason I'm pretty certain it's all a lot of nonsense.

This is worth a read:
http://www.ybw.com/forums/showflat.php/Cat/0/Number/2070828/page/0/fpart/1/vc/1
 
No need to rant or worry about it. You are in the same position as hundreds and possibly thousands of others. Nobody is ever going to ask you, because nobody, including HMRC is bothered.

At one time HMRC did issue certificates for the "interim" boats if you had the required evidence, but stopped doing it because there is no way anyone, least of all HMRC can ever prove that VAT has been accounted for correctly. This is the responsibility of the original trader who sold the boat, and they only have to keep records for 6 years. HMRC have no records at all.

Anyway, if your boat like mine was built before VAT was introduced, it is all completely irrelevant. You cannot get "VAT" exemption as that term has a specific meaning in VAT law and is applied to transactions that are outside VAT. Educational Services, which I provide to some of my clients is in this category.

On the other hand, if you sold your boat to a VAT registered trader, he would have to account for VAT if he then sold it - but not for the full value, only his "profit" just like a secondhand car.

VAT is a tax on transactions, not assets. If you as a private individual sell your boat to another private individual it is not a "chargeable event" so VAT is due.
 
Unless they believe you have 'imported' the boat into their waters, VAT status is no concern of other EU states.

While that may be the law you should be aware that some local authorities - police, customs etc. - may apply their own version of the laws for one reason or another. There have been stories of Greek authorities making up all sorts of taxes and putting their own local interpretations on national or EU laws.

A case in point I read of some years ago was a yacht calling into a small port in, IIRC, Sardinia. The obviously corrupt local police decided they could make a bob or two by declaring that any equipment on board manufactured outside Europe was "contraband" which they were going to confiscate. The authors of the article mentioned one of the policemen gleefully asking if they had the manual for the outboard which he was going to appropriate. They were prevented from sailing away by withholding their passports. I believe in the end they were allowed to leave on payment of a hefty bribe.

So - whatever the rules may say, be prepared for some local official to say something quite different and you will have no comeback (the British embassy/consulate will be NO help at all). Also, any documentation you can produce, even if not legally required or even valid, may reduce the risk of some jobsworth declaring 'your papers are not in order'.

If in doubt, stick it in the document file! I have all sorts of stuff - clearance certificates, light dues receipts etc. The sheer volume of paper has bemused officials before now /forums/images/graemlins/smile.gif
 
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So - whatever the rules may say, be prepared for some local official to say something quite different and you will have no comeback (the British embassy/consulate will be NO help at all).


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My bull5h1tometer has just gone right into the red!

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Remember the plane spotters who took photos at the Greek military airport? (Was it Preveza?) They actually had commited a crime and the Foreign office helped.

Are you still going to seriously claim the Foreign office no longer help people in legal trouble abroad?

I would think if a british crew were in prison in Greece for failing to pay a bribe it would make all the papers and they'd be out in days with a massive story to sell and a serious compensation claim.

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Also, any documentation you can produce, even if not legally required or even valid, may reduce the risk of some jobsworth declaring 'your papers are not in order'.

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So let's get this straight, you're saying a corrupt official prepared to invent laws will look at you document wallet full of documents and decide not to rob you? Why? Surely he'd just make up a law that wasn't vessel document related? Or do corrupt officials only invent laws about vessel documents? That's very good of them!

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Let's take a case study.

I'm a generally honest person and view paying a bribe as bad as asking for a bribe. Fortunately, in EU countries I feel fairly safe to stand by this, outside the EU I might have to modify my principles. (but even then in my very limited experience bribes often only save you time rather than save your life - eg: Pay £100 border fee and you'll be through in 1hr, otherwise it will take 2 days, that kind of stuff.)

So my boat pulls into a Greek Anchorage. A local boat comes out and tells me that X document is not valid for some plausable reason and I need to pay him cash.

I do the only morally acceptable thing and politely say no. Or maybe pay the fine but get a recepit and proof of his identity to double check later that I was guilty of the offence.

Let's assume that we get nowhere with this - if he's trying to steal he won't provide a receipt or ID and I won't pay any money without both.

Now he's got four options.

Imprison us all.
Take the boat by force.
Kill us all to stop us telling the world he's tried to rob us.
Let us go. (maybe after delaying us as as best he can)

Can you imagine the media hysteria any one of the first three would cause?

FWIW I've had limited dealings with French, Spanish and Greek police, and dealt with customs all over Europe & the States and I've never found any of them to be corrupt.

Anyway, thanks for kicking my Saturday off with a giggle! Small minded British paranoia against foreigners is still alive and well!

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I love sailing around Greece and you'll have to come up with a bit of evidence before you can convince me that it's too risky to go due to corruption!
 
I stand by my post. The examples quoted were hearsay but here is one I had from the horse's mouth.

My father was driving in a small town in Spain. He was stopped at some roadworks when a police motorbike came round a corner and rammed into the back of him. He was taken to the local police station where he was given a choice of waiting an indefinite time, potentially weeks, for a court hearing or leaving a deposit equivalent to the cost of repairing the bike. Even if he had stuck to his principles, the police were prepared to back each other up and say it was his fault, possibly resulting in a bigger fine. Foreign Office staff do not intervene in defence of British subjects who are alleged to have contravened local laws and they don't take up the cudgels on behalf of Brits who claim the local police are lying.

So don't tell me you can get round any corrupt official by threatening to tell the British press. Officials in out-of the way places know they <u>are</u> the law and there is no recourse. They don't give a monkey's about foreign press.

Don't go putting words into my mouth, I did not say it was too risky to go anywhere. I merely said that corruption and misinterpretation of rules does happen now and then so don't blithely assume that everywhere you go you will be treated according to a British interpretation of the rules.
 
Suspect you are confusing issues here. Legal proceedings are indeed different in different countries. And such incidents as you have just described can happen anywhere - even in this country as we have seen!

The point that is being made is that (in EU at least) there is little firm evidence that yachtsmen have difficulties with local officials if they have the basic paperwork - and in this particular case ie VAT evidence, virtually no evidence that any officials are in the least bit interested.

This does not mean that from time to time there are not incidents that come from local officials being either ignorant, lazy, awkward etc. but here is often more to the stories than makes it into folklore!
 
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I stand by my post.

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I'm sure you do, even though if you read the odd paper or listened to the news you would be well aware that the Foreign office do help people in legal trouble abroad - constantly. You're really not a fact based reasoner are you?

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He was taken to the local police station where he was given a choice of waiting an indefinite time, potentially weeks, for a court hearing or leaving a deposit equivalent to the cost of repairing the bike. Even if he had stuck to his principles, the police were prepared to back each other up and say it was his fault, possibly resulting in a bigger fine.

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B*llsh1t. What would his family have said if he hadn't returned home? It would soon have got out that he was in prison in Spain without charge. There would have been an outcry. Amnesty international would have got involved. Fair trials abroad. Is it really logical to believe that for the price of getting a motorcycle fixed policemen would have taken that kind of risk. There are only three options. 1) You're a liar. 2) Your father is a liar or 3) your father committed a very serious offence abroad that was so obscene he didn't feel able to tell his family. Based on your posts so far I'm going to bet that your father is a perfectly decant man not prone to getting in trouble with the law or making stuff up and you're the Walter Mitty.

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Foreign Office staff do not intervene in defence of British subjects who are alleged to have contravened local laws

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Yes they do. AAUI if you're held abroad from the first moment the British Consul will make every effort to visit you.

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and they don't take up the cudgels on behalf of Brits who claim the local police are lying.

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So lets get this straight. The crew of a boat are in a prison in Spain/Greece. The British consul comes to see them and they tell him they're being held for failing to pay a bribe and no charges have been laid. Then he'll tell you they're on their own?

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I did not say it was too risky to go anywhere.

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But you are saying British Tourists can be held indefinitely without charge in both Spain and Greece and that the Foreign Office will not get involved and that when you are finally released and you tell the world and the Spanish/Greek Government that one of their rozzers has held a boat load of British tourists for an extended period of time for failing to pay bribe the official won't care because 'they are the law'.

Are you seriously saying it's safe to go to such countries ?

Thanks for the laughs. I’ve got some guests coming for BBQ tonight one of whom is a civil rights lawyer. Most of her work is in the nastier areas of the world – I think she’d enjoy a visit to a holiday destination in Greece to free a boat load of British Tourists! She’ll certainly enjoy your last two posts!

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It seems impossible to debate with you as you seem determined to put words into my mouth. I never mentioned prison at any point, that is purely your invention. Then you have the nerve to call me a liar!

I am VERY sparing with the ignore button but for you I'll make an exception.

Conversation over.
 
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B*llsh1t. What would his family have said if he hadn't returned home? It would soon have got out that he was in prison in Spain without charge. There would have been an outcry. Amnesty international would have got involved. Fair trials abroad. Is it really logical to believe that for the price of getting a motorcycle fixed policemen would have taken that kind of risk. There are only three options. 1) You're a liar. 2) Your father is a liar or 3) your father committed a very serious offence abroad that was so obscene he didn't feel able to tell his family. Based on your posts so far I'm going to bet that your father is a perfectly decant man not prone to getting in trouble with the law or making stuff up and you're the Walter Mitty.


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You really are an offensive little man, aren't you ?

I am familiar with the incident described by SnowLeopard and can assure you that neither my father or SnowLeopard are lying. Perhaps, since you are chums with a lawyer, should familiarise yourself with the rules of evidence. You have no knowledge of the event and are simply making personal accusations based on your own prejudice.

The incident happened - it could have happened anywhere, including this country. The only difference is that our father was threatened with an automatic weapon which proved quite persuasive.

I suggest you wind your neck in promptly.
 
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Oh this is priceless! Absolutely priceless!

So we now have three hilarious claims:

1) The foreign office won't help UK citizens abroad.
2) You can be detained indefinitely in Spain purely as a result of a failure to pay a bribe.
3) Spanish Police are prepared to shoot people as the result of a failure to pay a bribe.

Or are you going to back track and claim he wasn't threatened with being shot. In which case what specifically was the threat that involved the automatic weapon?

Anyway, laughter is the best hangover cure so thankyou!

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Anyway, laughter is the best hangover cure so thankyou!


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Sorry - didn't realise you were posting under the influence. That might explain it.
 
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