VAT

[petie]

Continuing the saga of proving that VAT has been paid on a boat in the absence of the original invoice, two E mails and a number of phone calls from representatives of Her Majesties Customs and Excise all insist that the original invoice is the only acceptable document. The Legal Officer of the RYA pointed me to an RYA leaflet and confirmed that following discussions with HMCE etc, copies of the original invoice would be considered acceptable proof of VAT payment, at least within the United Kingdom. When I explained this to the appropriate adviser at HMCE, he asked me what RYA stood and who were they so he was a great help. Anyway, at least four of HMCE disagree with the RYA and on the balance of probabilities, I believe the RYA are correct. Now going through complaints procedure with VAT people.

[Sneds]

Good luck, must be very frustating!
I have an invoice from Essex Boat Yards stating the vessel is free of encumbrances and is VAT paid, would this be accepted by HMRC I wonder?

[petie]

Hi sneds

I had all of that but the experts at HMCE say "only the original will do" I think they are wrong and possibly the guy who was going to buy it but he wont take the chance now.

[NorthUp]

from HMRC website:
For how long must VAT records be kept?
''Generally you must keep all your business records that are relevant for VAT for at least six years. If this causes you serious problems in terms of storage or costs, then HMRC may allow you to keep some records for a shorter period.''
My boat is at least 20 years old, and the builder ceased trading around 10 years ago.
The last owner was paid cash in a private sale, the only paperwork I have (edit: relevant to VAT, I have a Bill of Sale) is his last marina bill, which I paid as part of the deal. (2008) So I have nothing on paper to satisfy the customs, and even if the builder was operating, he does not legally need to have kept the records this long anyway. If the builder doesn't need to keep the invoice, why should I?

[jfm]

Well since you have a HMRC contact so have opened dialogue, ask him a different question. Ask him:

"I am a private individual and I bought this boat in the UK from Mr X, another private individual". I have zero proof that any VAT has been accounted for on any previous sale(s) of the boat. When I bought the boat off Mr X, he didn't furnish me with a VAT invoice nor would I expect him to as he was selling it as a private individual, not in the course of a business.

Now, against that background
(i) do I owe you any VAT now?
(ii) if I sell the boat in the future to another private individual, as a private seller not carrying on a business, will I owe you any VAT then (under today's laws)?
(iii) will the person who buys from me it owe you any VAT then (under today's laws)?
(iv) in the event that, on an occasion when the boat was sold by one person to another prior to my purchase of it, VAT was incorrectly accounted for and a person's VAT liability wan't properly accounted for to HMRC and remains outstanding, could that liability be imposed on me or could it give rise to a right of distraint (or similar process) over the boat such that HMRC could take the boat and sell it to recover the unpaid prior VAT liability? If there is any such way that the liability could be imposed on me or any such right of distraint would you kindly point me to the statutory references please?"

The answer to all these questions is no. You don't need an HMRC bloke to tell you cos it is clear under the law. But if you can get them to answer "no" (which they must) then you're in great shape. This whole "proof of VAT paid" thing is a storm in the wrong teacup.

Good luck anyway!

[petie]

Basically, the VAT is due on first sale and goes with the event not the boat anyway but the people at HMCE seem to be a particular breed and fallback on "we have no power to discuss the rights or wrongs of the regulations". I dont think that in a thousand years the copy invoice would be questioned but if a buyer wants to stand by the rules there is not a lot that can be done. Hope the RYA wil get some sense out of them. They did after all seem to have come to some agreement even though none at HMCE know anything about it.

[Sneds]

Unless you're leaving the EU I am led to believe it is not a major problem.
Jsut what I've in the pub and not substantiated.us

[petie]

It is if you are trying to sell her but all I have ever been asked for when abroad is boat registration details such as PART 1 OR SSR

[jfm]

[ QUOTE ]
Basically, the VAT is due on first sale and goes with the event not the boat anyway

[/ QUOTE ]

Exactly. If someone failed to pay VAT earlier in the boat's life, that's not your problem nor can customs seize the boat. Period.

But you're right, buyers THINK it is a problem. This whole VAT thing has been massively and hamfistedly bigged up by the RYA (whose legal team are bottom quartile with distinction) even entering into discussions with HMRC about "will copy invoices be ok?". Now, through their mishandling, Joe Public boat buyer THINKS that VAT is his problem, so you have that hurdle to cross when innocently trying to sell your boat.

What we need from RYA is a big piece on their website saying VAT is not a problem for a future buyer even if all the invoices have disappeared, just as is being said on this and other threads. Pull your finger out RYA and read the law!

Sorry, in my post above I thought you were buying. I see now that you're selling. Same principles apply though.

[petem]

JFM, what you're saying doesn't quite make sense. If I (knowingly or unknowingly) bought a boat that had not had VAT paid on it I would not be able to absolve myself of the responsbility by claiming that is was down to the original purchaser to have paid it.

Pete