VAT

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Just to add some more fuel to the fire.

I purchased my boat from HMR&C. Paid cash, had the bill of sale signed by a commissioner and the boat is registered part 1. At the time of the transaction a got a receipt for the purchase price with a detailed invoice to follow. I eventually received a detailed invoice for the full amount with no mention whatsoever of VAT, whether it was included or otherwise. I have contacted them several times and even had my solicitor ask them for proof of VAT status but they simply washed their hands of us, referring us to our local VAT office, who didn't have a clue.

I eventually gave up.

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Says it all really doesn't it? /forums/images/graemlins/confused.gif
 
[ QUOTE ]
Just to add some more fuel to the fire.

I purchased my boat from HMR&C. Paid cash, had the bill of sale signed by a commissioner and the boat is registered part 1. At the time of the transaction a got a receipt for the purchase price with a detailed invoice to follow. I eventually received a detailed invoice for the full amount with no mention whatsoever of VAT, whether it was included or otherwise. I have contacted them several times and even had my solicitor ask them for proof of VAT status but they simply washed their hands of us, referring us to our local VAT office, who didn't have a clue.

I eventually gave up.

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HMRC can't issue a VAT invoice because they don't make taxable supplies (they don't have a trade). So you're probably in the clear because they will have paid VAT when they purchased it. Hmm - they may have purchased it, VAT free, from a supplier ouside the UK and 'forgot' to pay VAT (to themselves) on importation.
 
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HMRC can't issue a VAT invoice because they don't make taxable supplies (they don't have a trade). So you're probably in the clear because they will have paid VAT when they purchased it. Hmm - they may have purchased it, VAT free, from a supplier ouside the UK and 'forgot' to pay VAT (to themselves) on importation.

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Of course they may have seized the vessel from some some scroat and not actually purchased it. Now what? /forums/images/graemlins/smile.gif
 
Yes, the boat had been seized but that's HMR&C's problem, not mine. If VAT is due on the boat then HMR&C have to account for it, not me.
 
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that's HMR&C's problem, not mine

[/ QUOTE ]I wish you it isn't, but it could well be.
Assuming that Observer is right saying that HMR&C is a VAT exempt institution, I wouldn't be surprised if you should have calculated and paid the VAT yourself, based on their VAT exempt invoice.
Then again, as already mentioned, all I'm saying is based on a knowledge of VAT system which isn't specific of the UK. Surely jfm or others more in the know re. UK regulations will be able to confirm or correct as appropriate.
 
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you should have calculated and paid the VAT yourself

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Why? I bought the boat as a private individual and have a receipt for my payment that states quite clearly "paid in full".
 
Doing some guesswork here (remember my previous disclaimer! /forums/images/graemlins/smile.gif), but...

1) "paid in full" could simply mean that you paid the agreed price;
2) if the boat was owned by a VAT exempt institution, they neither could/should have paid the VAT upon purchase, import, seizing, or whatever (not a matter of forgetting - I beg to disagree with Observer on this point), nor they could/should have applied VAT when selling and invoicing to yourself;
3) as a result, you're a private individual (hence subject to VAT) purchasing a boat with a non-VAT paid status. The invoice in this case is logically similar to an import invoice (except that you don't need to bother with CE stuff, as long as the boat is CE-approved), and you must pay the full 17,5% on whatever you "paid in full" to the seller.

I guess it might sound ridiculous, considering that the seller was HMR&C, but if you try to abstract from that you'll probably see what I mean...
Again, not wishing you that this is actually the case - I might well be totally wrong.
 
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that's HMR&C's problem, not mine

[/ QUOTE ]I wish you it isn't, but it could well be.
Assuming that Observer is right saying that HMR&C is a VAT exempt institution, I wouldn't be surprised if you should have calculated and paid the VAT yourself, based on their VAT exempt invoice.
Then again, as already mentioned, all I'm saying is based on a knowledge of VAT system which isn't specific of the UK. Surely jfm or others more in the know re. UK regulations will be able to confirm or correct as appropriate.

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Mapis that isn't correct. JoeQ absolutely does not have to pay VAT on this transaction. As Observer said, HMRC is not a VATable trader, but even if they were, JoeQ would STILL not have to pay VAT. I'm sure I've said this before but will shout it one more time: when you purchase a boat inside the UK you, as purchaser, NEVER have to pay any VAT to HMRC. The only person who MIGHT have to pay VAT to HMRC is the SELLER. NEVER the purchaser. When I say NEVER, I mean NEVER. NO EXCEPTIONS /forums/images/graemlins/grin.gif
 
as purchaser, NEVER have to pay any VAT to HMRC. The only person who MIGHT have to pay VAT to HMRC is the SELLER. NEVER the purchaser. When I say NEVER, I mean NEVER. NO EXCEPTIONS

Stop sitting on the fence jfm /forums/images/graemlins/smile.gif How was SoF this w/e? Any good pics?
 
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Doing some guesswork here ...

3) as a result, you're a private individual (hence subject to VAT) purchasing a boat with a non-VAT paid status. The invoice in this case is logically similar to an import invoice (except that you don't need to bother with CE stuff, as long as the boat is CE-approved), and you must pay the full 17,5% on whatever you "paid in full" to the seller.

...I might well be totally wrong.

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Mapis, with respect, there is no place for guesswork on this thread. It's a confusing subject already, and guessing doesn't clear it up. Moreover, your guess is totally wrong. The boat in this case does not have "non VAT paid status". That expression/concept is an oxymoron and doesn't even exist in UK law in this context. I repeat, VAT is a tax applicable on people and transactions; with some limited exceptions (not relevant here but mentioned above) there is no such thing as VAT paid status of a boat. There might be a question "was VAT correctly paid on the transaction?" but the answer is (a) yes it was cos HMRC sold it and they have no obligation to charge VAT and (b) anyway it's entirely a matter for the seller not the purchaser

I don't know how to say this more clearly: the buyer of a boat in the UK NEVER EVER has to pay VAT to HMRC on the purchase. NEVER, NEVER NEVER. Any VAT payments to HMRC are only an obligation of the seller. Has anyone here ever bought a TV for £100 then posted a cheque for £17.50 to the government?

The only time a person has to pay boat VAT to HMRC is if they sell a boat (in the course of a trade) or import a boat (private or trade).
 
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Stop sitting on the fence jfm /forums/images/graemlins/smile.gif How was SoF this w/e? Any good pics?

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SofF was lovely. Cool, but clear blue sky and azure blue flattish (slight swell) sea. It's gorgeous being at sea cos you have all the blueness around you but you can see the snow on the southern alps too. Fabulous!

Alas no pictures, sorry! Also I spent most of the weekend packing the boat contents into boxes. It is sold, and removal man is bringing stuff back to UK next week for sort out and loading onto new boat in the new year. I never realised how much spares and gear stuff there was on the boat. I'd be embarrassed to say how many of those archiving boxes I filled. I'd like to weighbridge the removal van empty, then again when loaded... I bet it's a tonne, eek!
 
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that's HMR&C's problem, not mine

[/ QUOTE ]I wish you it isn't, but it could well be.
Assuming that Observer is right saying that HMR&C is a VAT exempt institution, I wouldn't be surprised if you should have calculated and paid the VAT yourself, based on their VAT exempt invoice.
Then again, as already mentioned, all I'm saying is based on a knowledge of VAT system which isn't specific of the UK. Surely jfm or others more in the know re. UK regulations will be able to confirm or correct as appropriate.

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There are no circumstances I know of, except importation of goods from outside the UK, where a non-taxable person who buys goods or services for private (non-business) purposes EVER has to "calculate and pay VAT himself". It is a fundamental principle of VAT (as jfm has explained) in 'ordinary' transactions that it is ALWAYS the supplier who is responsible for accounting for VAT.
 
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There are no circumstances I know of, except importation of goods from outside the UK, where a non-taxable person who buys goods or services for private (non-business) purposes EVER has to "calculate and pay VAT himself". It is a fundamental principle of VAT (as jfm has explained) in 'ordinary' transactions that it is ALWAYS the supplier who is responsible for accounting for VAT.

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Absolutely kreckt Observer.

I know you're familiar with this stuff. What do you reckon? Worthwhile RYA/MBY getting this sorted out once and for all so ordinary people trying to sell boats privately don't have to run around doing all this "proof of VAT paid status" shenanigans?
 
It's actually a bit strange. A buyer in France has signed a contract to buy the boat but not paid deposit. His money is locked up till 24/11 (today). So if he pays deposit in next couple of days it's sold; if not then he will have been a timewaster and it'll get traded in. I do think he is genuine. Would be much less hassle to sell it to him, so fingers crossed. Either way I need to do the removal van thing so that's going ahead anyway

Also, I have given this buyer guy a trade-in underwrite on his current boat. So I might er own a boat I don't want and will flip it quickly at massive discount. Fortunatley I can stick it in my Antibes berth and keep new boat in UK till say Feb or even April. Not saying what the trade-in is right now cos he has it advertised all over the 'net and I don't want to undermine his sale of it at a higher price than I'm giving him as trade-in. He did have a buyer trying to buy it, which i hope happens, cos I don't really want it. I'm confident I can flip it quickly at literally 2/3 the going rate for the boat.
 
In principle, it's a good idea but, as you know all too well, indirect tax is complicated, particularly where there is any cross-border element (that's why the experts can charge so much for advising on it).

I can see how it is reasonably practicable to produce a lay guide to how VAT on boats applies where a sale takes place in the UK (although even then there could be difficulties, for example a person who buys with knowledge that the seller has not accounted tor tax or intends not to account for tax).

Then there's the practical considerations. Of course it's right that "proof of VAT paid" is not legally required in the UK and, even if it was, that a VAT invoice (original or copy) is only circumstantial evidence (at best) that a VAT registered seller (probably) has accounted for tax. However, stating the legal fact (for UK purposes) that 'VAT paid' is a meaningless description does not help the owner who has taken his boat outside the UK and is faced with a demand by non-UK authorities (the scope of whose powers I do not know but wouldn't like to have to argue about) to show proof of VAT paid.

In other words, how do you frame the terms of reference for the expert(s)? Too narrow and the 'guide' is of limited value; too wide and it will be no easier to understand than the law itself.
 
It would be a start to get the 'professionals' -

-Banks
-RYA
-Brokers
-Surveyors

To fully understand the rules and simple stop propergating the myth.

Once again with the current boat purchase the first thing the bank want to see is proof of VAT paid.
 
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It would be a start to get the 'professionals' -

-Banks
-RYA
-Brokers
-Surveyors

To fully understand the rules and simple stop propergating the myth.

Once again with the current boat purchase the first thing the bank want to see is proof of VAT paid.

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That's easy to say but these 'stakeholders': (a) in many (probably most) cases do not understand the rules themselves and (b) have a degree of vested interest (as does HMRC of course) in NOT de-mystifying the issues.
 
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However, stating the legal fact (for UK purposes) that 'VAT paid' is a meaningless description does not help the owner who has taken his boat outside the UK and is faced with a demand by non-UK authorities (the scope of whose powers I do not know but wouldn't like to have to argue about) to show proof of VAT paid.

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Yep, would you want to argue the point with these people?

DFPhotos031-douanes.jpg


Great thread by the way, top marks jfm for casting some light on the subject.
 
But I think that is another point. Any EU country cant just decide to charge VAT. It is the resposibility of the nation/state where the item was first purchased or put into service to charge VAT.

All the french/spanish/italians can do is report the beleived infringement to the UK HMRC to investigate.

The boat I purchased in the summer was not VAT paid because we purchased it through the NMT legislation. Even so, the revenue bods from any of the countries we passed through would have no right to charge VAT as it was being use din accordance with EU law.
 
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