vat / tax paid

[cloud7]

How often have members been asked for vat paid status cruising spain / portugal, thks

 

[jonic]

It's happening more and more, there were some purges in a few Spanish Marinas recently, not just for vat.

 

[ukmctc]

I understand the best way is to make sure you have the boats history in ships papers, and that means class 1 ships register UK. This includes the sale history proving Vat pat paid.

 

[jordanbasset]

As yet never, but suppose there could always be a first time

 

[macd]

How often have members been asked for vat paid status cruising spain / portugal, thks

Without getting into the notion of the VAT 'status' of a boat (it can't have one*): never for me, nor for any boaties I've met. In fact the only time I've been asked was by a bunch of heavies in a RIB off the Scillies. When I told them she was exempt they left without further ado. Very rigorous.

* even though HMCE themselves use the expression, which only shows they're as confused as the rest of us.

 

[Tranona]

It is not common. EU law is quite clear that VAT matters are the responsibility of ther state where the last transaction involving the boat took place. So your Bill of Sale is important. The caveat in places like Spain and Portugal is that they are nentry points for boats coming into the EU as first port of entry, so will clearl show an interest in boats that were not bought in the EU.

BTW ukmctc not sure that Part 1 registration "proves" VAT has been paid. There is no proof that it has been "accounted for", only evidence that the purchaser (when the transaction was a chargeable event) paid VAT and can produce the original invoice. If you are lucky as a subsequent owner this has stayed with the ships papers. However there is no legal requirement to keep the receipt, but clearly inconvenient if it is lost

 

[jonic]

It is not common. EU law is quite clear that VAT matters are the responsibility of ther state where the last transaction involving the boat took place. So your Bill of Sale is important. The caveat in places like Spain and Portugal is that they are nentry points for boats coming into the EU as first port of entry, so will clearl show an interest in boats that were not bought in the EU.

BTW ukmctc not sure that Part 1 registration "proves" VAT has been paid. There is no proof that it has been "accounted for", only evidence that the purchaser (when the transaction was a chargeable event) paid VAT and can produce the original invoice. If you are lucky as a subsequent owner this has stayed with the ships papers. However there is no legal requirement to keep the receipt, but clearly inconvenient if it is lost

The system is a mish mash but the original receipt seems to be taking on more importance. Throw in a language barrier and officials who interpret the "rules" differently from Port to Port and off we go.

HMRC have said at an ABYA lecture that although VAT is the responsibility of the specific state, they WILL act on each others behalf now.

The advice is that it is rare but certainly not impossible to be challenged if you do not have the vat receipt or some other evidence when cruising foreign waters. There has definitely been an uptick in recent years regarding being asked to show the documents. I was asked for mine by French customs in the Gulf de Lion a few years ago. They came alongside and I had to wrap it all up and put it in a long fishing/landing net which they had a man on the bow for. They kept the docs for a long time and noted everything.

 

[Tranona]

The RYA ran a survey a couple of years ago which suggested the opposite - few people reported being asked for VAT documents. There was a lot in the early days of EU wide VAT until it became clear that it was a non-issue for most people.

I am sure that HMRC co-operate with other authorities, but that does not mean they have any legal powers to investigate transactions that took place in another EU state. The kind of people they are after are those EU residents who arrange their affairs to avoid paying VAT while still using their boats in the EU. As you know there are many ways of doing this, some of which are legal, but by their nature they are often cross border (UK resident, keeping a UK built boat in SofF but boat owned in Gibraltar, for example). It is good that they try to keep tabs on such people - but that is very different from random checks on ordinary cruising people.

 

[macd]

The kind of people they are after are those EU residents who arrange their affairs to avoid paying VAT while still using their boats in the EU. As you know there are many ways of doing this, some of which are legal, but by their nature they are often cross border (UK resident, keeping a UK built boat in SofF but boat owned in Gibraltar, for example). It is good that they try to keep tabs on such people - but that is very different from random checks on ordinary cruising people.

Indeed, these people (plus arrivals in EU from elsewhere) are the only ones who it makes any sense to police. If as a private individual I bought my boat in a the EU and can prove it, regardless of any specific VAT evidence, then it's hard to see how any VAT offence could have been committed by me: by the person who sold it to me, maybe, but that's not my problem, or ought not to be.

 

[GrahamM376]

How often have members been asked for vat paid status cruising spain / portugal, thks

We have never been asked for VAT documents anywhere and have now been based on the Algarve for 4 years, cruising Portugal, Spain, Gib etc. Only time we have been asked for any papers, only SSR & insurance, is when occasionally visiting marinas. With scanners, OCR, computers and printers, documents are no longer a problem anyway.

 

[daveyw]

Maybe a better question

would be. What has happened when you have been asked for VAT status and have not been able to provide it?

 

[macd]

With scanners, OCR, computers and printers, documents are no longer a problem anyway.

You'd have to be pretty adept with your mouse to replicate my faded, dog-eared, stained, photocopy-of-a-bad-fax "evidence" of where my boat was in '92

But you do make a fine point, although far be it from either of us to condone a little clandestine home publishing. There's little reason not to have convincing evidence these days.

 

[capnsensible]

Never.

 

[Tranona]

would be. What has happened when you have been asked for VAT status and have not been able to provide it?

Probably nothing, as it is not an offence not to have a receipt. In "normal" circumstances a private individual cannot commit a VAT offence so nothing can happen. In the event that the individual has imported a boat and not paid the VAT, he has to pay plus a penalty or the boat is seized to meet the payment. In the even rarer event that the boat has subsequently changed hands, the boat can be seized in lieu of payment.

All this of course after HMRC have followed due process.

 

[capnsensible]

Hiya Ray,

Just to quantify my reply, thats over the last 16 years on 22 different vessels, more than 30 entries to Portugal, more than 1200 to Spain!

Had to do a bit of looking up