VAT

jfm, much respect to you, wow you must be good. I am only trying to make the point, probably rather poorly, that the legislation that was introduced for carousal fraud is now being used (possibly in a changed format) in different sectors. Last year it was introduced into recruitment against MSC's, again to combat fraud. Who knows where it will end up next?

But in the context of this thread, I believe that if you have a copy of the original invoice, this will suffice. I do think that you need atleast that though, in order to show that the VAT has been paid at some point.
 
Just a simple query jfm, could HM Customs use the debt follows the boat argument, or does this only apply to outstanding mortgages?
 
Grrr. You need to read the law mate. The carousel laws simply cannot apply to the boat transactions we're talking about here. Do I really have to cut and paste the entire bludy statute in here to explain why that is so? (Don't worry, I'm not going to /forums/images/graemlins/grin.gif) It is just idle pub talk to say that the carousel laws could apply to boat transactions, and utterly wrong.

The carousel laws are all online. Go on, tell me why/how they could be extended to boats. They're written in plain English, should be easy for you to quote the relevant sentences. I'm trying to prove a negative here cos I am saying the law doesn't exist. The only way I can do that is cut/paste 7000 pages of statue in here and say "Hah! Look, it isn't in there!" Would be much easier for you to prove your positive, just cut and paste 3 sentences of law that impose Boatseller A's tax on Boatbuyer B

You then switch to "Future" mode and say "where will it end up?" So did i misunderstand you? Did you mean to say that B is not TODAY responsible for A's tax but he might be in a few years time". So sorry. I thought this thread was about the present
 
"could HM Customs use the debt follows the boat argument". No, cos it doesn't exist. It's just said in pubs and on forums. There is no UK law that says the debt follows the boat, period. If anyone thinks there is, post it here and I'll shut up. With some limited exceptions, if HMRC are trying to collect tax from Mr A they cannot seize (distress, to use the technical term) a boat now belonging to Mr B, on the flimsy ground that Mr A used to own the boat.

If you were Prime Minister, would you wake up one morning and think, "I know, here's a great idea. Let's pass a law that says Mr B is responsible for Mr A's tax, just cos Mr B now owns a boat bought in good faith that Mr A used to own a few years ago. It doesn't matter that Mr B has never met Mr A, he can jolly well pay Mr A's tax".

Seriously, would you? Is that how you think a civilised generally fair country should be run? Would you pass a law saying each person is laible for the income tax of their neighbour to the left, if that neighbour doesn't pay his own tax? (the neighbour wont be able to afford to pay his tax, cos he's used up all his money paying his neighbour's tax)

(This is totally different from carousel fraud tax, where B is responsible for A, becuase the context is differnet and there needs to be an incentive on B to make sure he buys only from honest Mr As. The carousel taxes apply to businesses who have the resources to operate the taxes. They do not apply to Joe Public buying a leisure asset in a private capacity).
 
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if you have a copy of the original invoice, this will suffice. I do think that you need atleast that though, in order to show that the VAT has been paid at some point.

[/ QUOTE ]

Dont tell us what we ought to do. Please tell us instead what precisely will happen if the boat owner does NOT have the invoice. That ultimately is what this debate is about. And please assume a HMRC inspector makes an inspection on the boat owner and discovers that he doesn't have the invoice, so all the cards are on the table.

Go on. Please tell me what will happen
 
I would guess that if the current owner does not have the original invoice, then it would really only affect them in a sale if the purchaser was not happy to proceed not knowing the VAT had been paid. How else can it be shown that the VAT was invoiced for?

If it were HMRC sitting there, I guess Mr Average would expect lots of bills from professional advisors for the mountain of correspondence that would follow..?
 
Congratulations on spectacularly missing the point.

It doesnt matter if the vat has or has not been paid, it is not the future owners liability. the liability to pay the VAT is with the first owner. End of.

In fact, a VAT invoice in itself is no proof that the VAT has actually been paid. all it actually shows is that the VAT has been collected. There is nothing to show that the VAT amount was passed onto HMRC by the dealer/manufacturer.

So if you are after proof that VAT has been paid, you will never get it because it doesnt exist.

Let me ask you another question, when you last bought a second hand car, did you ask for proof that the VAT had been paid?
 
Exactly. That's kinda the whole point. This whole VAT problem is in the minds of Joe Average boat buyer. It's not that any tax is payable under any law. Sadly, this view has gained a lot of momentum which the RYA have not helped with, and that in a nutshell is OP's problem.

This whole thing could be sorted out in a big way if RYA issued a proper briefing saying that the VAT thing has been bigged up too much

Ref the second para, I disagree. The 99% likely answer is that nothing would happen. If strangely the tax inspector said there was some tax to pay it would take one letter to put him striaght. There would be no fees cos the letter could be provided on this forum for free :-)
 
You are quite right phil. In the absence of the original VAT invoice and the negative response from HM Vat people, my buyer has developed cold feet and called off the sale. Even though I am now personally persuaded that the vat people could ever legally call for VAT to be paid on the boat.
 
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In fact, a VAT invoice in itself is no proof that the VAT has actually been paid. all it actually shows is that the VAT has been collected.

[/ QUOTE ]Or indeed (for completeness) can never show whether or not the VAT has been subsequently reclaimed for one reason or another....

Only two arguments I can see for wanting a VAT invoice are:

1] Because it makes potential future buyers happy

2] It makes overseas customs teams happy when you arrive in a foreign port

Neither of which have any basis in law at all, but are present factors nevertheless
 
I understand all that, which is why I put invoiced and not paid, as you could then show it is not you who is liable. What if you buy a boat that has not had the VAT paid, for some reason, you would surely need to show you bought it in good faith?

If you buy a car in the UK and it is registered as such, then you know the VAT has been paid and is not a worry. But on boats, they are not registered like that, so you could be buying a boat which was imported and sold on to you, no one the wiser.
 
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Only two arguments I can see for wanting a VAT invoice are:

1] Because it makes potential future buyers happy

2] It makes overseas customs teams happy when you arrive in a foreign port

Neither of which have any basis in law at all, but are present factors nevertheless

[/ QUOTE ]

That's exactly correct Morgana. Unfortunately. Wouldn't it be nice if RYA fixed this by issuing some VAT advice, instead of repeating the made up VAT liability scare story. Would save a lot of trouble for poor Joe Publics out there.
 
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"could HM Customs use the debt follows the boat argument". No, cos it doesn't exist.

[/ QUOTE ]I take your word for it, but I'm very surprised to hear that.
In I (and I'm pretty sure also about F and D), that argument does apply.
Not specifically for boats, admittedly, but for any registered goods.
I mean, if a boat is:
a) owned by a private individual, and
b) registered in Italy
The fact that VAT has been paid is a straightforward implication, and even if you lost the invoice you should be able to track that back, either to the original sale invoice if built in Italy or in the import papers if imported.
BUT!
If for any reason that evidence can not be provided, rest assured that the a.m. argument can and will be used.
 
Sure, the rules on tax collection vary widely among EU countries. I was talking UK only.

I'm not sure what you say about I F and D is correct for a subsequent owner. Yes if Mr A imports the boat and he fails to pay his VAT, then the I tax guys can take his boat. As they can in the UK, ultimately. But what if it has ben sold to B then C then D. Does D suffer the seizure of the boat, say 5 years later, having bought it in good faith? I dont think he does, but I'm not sure, would have to email an I tax lawyer

Logging off now
 
jfm

Could peterfs offer some kind of indemnety (perhaps backed up with an insurance) to the prospective purchaser?
It seems to me that all he would need to do is insist that he (peterfs) is involved in any discussions.

Surely that will satisfy the new purchaser.
 
Yup, afaik he does, regardless of the number of passages in between.
Though timewise, possibly the general 5 years prescription applies, I should check that.
Mind, I'm talking about registered boats (>10m LOA), whose sale requires even a notary act!
But yes please, check the matter with your Italian contact. Glad to hear if he tells anything different.
 
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Sure, the rules on tax collection vary widely among EU countries. I was talking UK only.

[/ QUOTE ] You surely were but isn't it European Law that applies in the case of VAT? Brussels certainly sets minimum levels, the articles it is charged on etc. And its not only the UK that seems paranoid about proof-paid. I have been asked for it on my UK-registered boat in Holland and haven't there been stories of the French getting snotty and of the Spanish actually seizing boats where satisfactory proof cannot be produced.
 
Mr A buys a new boat and pays VAT, than takes out of Europe or claims the VAT back as used in charter.

He could be still left with an invoice saying VAT was paid.

So a VAT invoice might not mean a thing!
 
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