VAT

[slipknot]

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Currently I am cruising with 21m, so VAT issue is mentally very big thing for me and I sleep much better when knowing it has been fully paid!!

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A good post on understanding that the theory sometimes encounters the practical. 21m?, yeah, I can understand you wanting to sleep soundly on that [img]/forums/images/graemlins/smile.gif[/img]

But I also understand that someone somewhere would be happy to pocket the VAT on a boat of that (likely) value......and I too would not want to be the one having to deal with the consequences (whether I was legally right or not).

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It all relative buddy [img]/forums/images/graemlins/wink.gif[/img]

[jfm]

Managed to escape jail, phew. Went to LHR and Antibes after the show yesterday. Just going to airport now for flight home, will post VAT reply later tonight...

[jfm]

Ok, quick report. I went to LIBS yesterday (satruday - was quite busy, have to queue for some boats and still couldn't get on the oyster!). I spoke to HMRC but dont have much to add that slipknot hasn't already said

I asked them who knew about boat VAT and was directed to a lady mid 30s in HMRC uniform. Told her I'm contemplating buying a 2nd hand boat with no VAT papers, owner has lost them

She said "Don't buy it. You need to be able to prove VAT status"
To whom? I said.
HMRC she said.
I said why; the only transaction I'm doing is buying a boat (not importing it, it's already in UK) so I can't have a VAT bill at all.
She said no, I have to prove VAT status.
What if I can't, I said.
Well you will have to pay the VAT then, or have the boat confiscated.
But I dont have any VAT obligation to HMRC, all I did was buy a boat.
But it's not a VAT piad boat, she said
I said there isn't such a thing as "VAT piad" is there. VAT is applied to transactions not boats, right?
Then she repeated herself lots (At this point I could tell from her manner/hesitation she didn't know the law)
I said let's suppose a previous owner had fraudulently imported boat Jersey-UK and not paid VAT. Now I am 3 owners along the line and I own the boat. Surely I am not resp for another citizen's VAT?
Look, if you're sailing a boat in EU water it must be vat paid.
Where's the law? I said.
She handled me an irrelevant leaflet
Look I said, if a previous owner failed to pay VAT at import you need to chase him not me, right?
No, if you own the boat it's your VAT oblig she said
Please can you point me to the law I said. She opened a leaflet and pointed me to a sentence that mentioned an Act of Parliament but it was a random refernece, it didn't confirm her contention at all, she hadn't a clue about the actual law.
She turned to my son and said "Is he always like this?"
Suppose it wasn't a boat that I bought, but a very vlauable piano, I said
Ah that's ok, if pian isn't VAT paid we wont chase after you
So why the difference?
Well there are different rules for boats she said
Ah, right, so can you point me to the VAT law which applies just to boats I said
She gave me a leaflet about sailing your boat into UK waters.
That doesn't apply to me I said. I'm buying a boat in the UK. I'm not importing it
Well the boat still has to be VAT paid if you own it Sir
Ok, I said, if the previous owner didn't pay import VAT and now I own the bot, you're saying I have to pay his tax?
She hesitated. Yes
Can you think of any other area of UK law in which citizen B pays citizen As tax?
Er, well, no.
I politely told her I thought she was wrong. I said she is mixing up the concept of (a) me importing the boat and failing to pay the VAT, in which case it could be colloquially said to be "not VAT paid" and liable to confiscation from me to pay my tax debts, with (b) the situation of the next owner. I politely asked her to ask a senior colleague back at the office to show her the code section that says B's boat is confiscated to pay A's tax, becuase it is an utterly daft idea. but if the code exists her boss should be able to point to the actual sentence. She said she would, and a small penny dropped in her head that her story didn't make sense, I think
She gave up at this point and so did I.

Like I said, nothing new to report really. It was obvious this person had only the slightest grasp of tax law, no more.

I might write to HMRC to get a written view from their senior people. I'm still disappointed the mags MBY/MBM are not more on the case with this. It affects their readership hugely

[slipknot]

Deja vu!

Well done JFM for taking this up with HMRC, you clearly got exactly the same story as I did, despite your very significant knowledge and confidence to challenge them on the subject.

Come on RYA, dont you think this is a matter you should take up, and sort out in the best interest of your members? (ie me!)

I intend to email the legal dept at the RYA today refering to this thread and including some specific excerpts inviting them to respond.

[Hurricane]

Well done jfm

Nothing new here but I, too, think its about time that the organisations that are representing us should "speak out" and put this matter to bed. After all, Gordon says that he "leads the world" - maybe we should do the same here.

So - here's the challenge.
The RYA SHOULD be the people to cary this forward - in fact they could do so much good for their members here and take all the credit if they actually get their act together.
However, I think you all know my views of the RYA - a complete waste of time - they will do nothing - come on, RYA, prove me wrong - I'm prepared to eat humble pie if you take this one up.

Now to the mags - particularly IPC's ones.
I have great respect for your commitment to our industry but I would be a bit dissapointed if you dont run with a few articles on this matter. The subject affects most of us. I'm sure you also have good contacts elsewhere (the BMF for example) and between you you could raise a strong campaigne.

Come on guys (the professionals I mean) go for it - sort out this mess.

[DAKA]

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She turned to my son and said "Is he always like this?"

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[img]/forums/images/graemlins/laugh.gif[/img]




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I might write to HMRC to get a written view from their senior people.

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Thats the best way to sort it out, once they try to put it in writing they will soon realise the reality of the situation.

Perhaps a low value Tender should be quoted in case it goes wrong, after all how many boats are sold with VAT documentation along with a dinghy that doesn't even get a mention.

[Nick_H]

Does it need to be that expensive? The RYA have lawyers who could draft a letter to counsel. The questions are quite straight forward, and it seems from responses on here that the law is quite clear, so I can't see counsels fees being more than £10k? IPC, RYA, BMF and YBDSA can pay £2.5k each?

[Rogershaw]

I deal with Customs and Excise in South Africa every day, who's laws are very simular to that of the UK, and in fact UK case law is oftain quote. I have been following this with great interest and add if comment.

My view is that HMRC cannot incest on the buyer to proofing that payment of VAT has been made at it is the responsibility seller to collect and pay the VAT to HMRC if the seller is a VAT registered company.

If the seller did not pay the VAT over for any sale not just boats he has committed the crime of tax evasion for which HMRC must charge him and take him to court.

In most countries the prosecution must prove you have committed the crime you have been charges of. In this case VAT may or may not have been paid there is not proof that it has not been paid so no proof that a crime has been committed. In any case if it was not paid it is the seller of a VAT registered company who has committed a crime and must be charged not the purchaser.

I have said this before that if you take your car to France no one is interested in the VAT status of your car so why boats.

[benjenbav]

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I might write to HMRC to get a written view from their senior people.

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I hope you do this. It would be quite amazing if the boat buying punter could be liberated from the urban myth.

[David_Jersey]

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I might write to HMRC to get a written view from their senior people.

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I hope you do this. It would be quite amazing if the boat buying punter could be liberated from the urban myth.

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IMO it would be quite amazing if HMRC put anything useful in writing [img]/forums/images/graemlins/frown.gif[/img]



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Ok, quick report. I went to LIBS yesterday (satruday - was quite busy, have to queue for some boats and still couldn't get on the oyster!). I spoke to HMRC but dont have much to add that slipknot hasn't already said

I asked them who knew about boat VAT and was directed to a lady mid 30s in HMRC uniform. Told her I'm contemplating buying a 2nd hand boat with no VAT papers, owner has lost them

She said "Don't buy it. You need to be able to prove VAT status"
To whom? I said.
HMRC she said.
I said why; the only transaction I'm doing is buying a boat (not importing it, it's already in UK) so I can't have a VAT bill at all.
She said no, I have to prove VAT status.
What if I can't, I said.
Well you will have to pay the VAT then, or have the boat confiscated.
But I dont have any VAT obligation to HMRC, all I did was buy a boat.
But it's not a VAT piad boat, she said
I said there isn't such a thing as "VAT piad" is there. VAT is applied to transactions not boats, right?
Then she repeated herself lots (At this point I could tell from her manner/hesitation she didn't know the law)
I said let's suppose a previous owner had fraudulently imported boat Jersey-UK and not paid VAT. Now I am 3 owners along the line and I own the boat. Surely I am not resp for another citizen's VAT?
Look, if you're sailing a boat in EU water it must be vat paid.
Where's the law? I said.
She handled me an irrelevant leaflet
Look I said, if a previous owner failed to pay VAT at import you need to chase him not me, right?
No, if you own the boat it's your VAT oblig she said
Please can you point me to the law I said. She opened a leaflet and pointed me to a sentence that mentioned an Act of Parliament but it was a random refernece, it didn't confirm her contention at all, she hadn't a clue about the actual law.
She turned to my son and said "Is he always like this?"
Suppose it wasn't a boat that I bought, but a very vlauable piano, I said
Ah that's ok, if pian isn't VAT paid we wont chase after you
So why the difference?
Well there are different rules for boats she said
Ah, right, so can you point me to the VAT law which applies just to boats I said
She gave me a leaflet about sailing your boat into UK waters.
That doesn't apply to me I said. I'm buying a boat in the UK. I'm not importing it
Well the boat still has to be VAT paid if you own it Sir
Ok, I said, if the previous owner didn't pay import VAT and now I own the bot, you're saying I have to pay his tax?
She hesitated. Yes
Can you think of any other area of UK law in which citizen B pays citizen As tax?
Er, well, no.
I politely told her I thought she was wrong. I said she is mixing up the concept of (a) me importing the boat and failing to pay the VAT, in which case it could be colloquially said to be "not VAT paid" and liable to confiscation from me to pay my tax debts, with (b) the situation of the next owner. I politely asked her to ask a senior colleague back at the office to show her the code section that says B's boat is confiscated to pay A's tax, becuase it is an utterly daft idea. but if the code exists her boss should be able to point to the actual sentence. She said she would, and a small penny dropped in her head that her story didn't make sense, I think
She gave up at this point and so did I.

Like I said, nothing new to report really. It was obvious this person had only the slightest grasp of tax law, no more.

I might write to HMRC to get a written view from their senior people. I'm still disappointed the mags MBY/MBM are not more on the case with this. It affects their readership hugely

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Fair play to you for going into this - and I suspect that you may be the one who is right.......but I keep imagining something like the above conversation in French, Spanish or Greek.....with it up to me to "prove" my innocence through a foreign legal processs (£££) - otherwise the boat remains chained to the dock [img]/forums/images/graemlins/frown.gif[/img]

Somehow I don't think a 12 page thread from YBW.com (even if gone through Google translate [img]/forums/images/graemlins/ooo.gif[/img]) will work quite as well as the original VAT documents. (of course each to their own on what docs folk want when buying or selling).