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  1. #111
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    Default Re: Apologies for repeating myself, but...

    That's a pretty safe bet, if I've ever seen one!
    [img]/forums/images/graemlins/laugh.gif[/img]
    ...at least, in the terms expressed by 1955Chris.
    OTOH, he has a point when he says that advocating bona fide rights in a dodgy transaction might not be enough for the buyer.
    That's already been debated at length actually, and I agree that in principle the obligation is only upon the seller, but I would rather not be in the buyer's boots either...

  2. #112
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    Default Re: Apologies for repeating myself, but...

    Sure, i agree it is better to have the right paperwork. But it's still worth understnading/establishing whether or not I can be forced to pay money to the government just becuase Mr Smith failed to pay!

  3. #113
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    Default Re: VAT on Boats was Apologies for repeating myself, but...

    1955chris, you have made a number of errors

    Firstly , again the yacht has no "VAT status" even though the term is routinely used.

    The sale of goods and services in the EU are vat-able, thats the default position, it doesnt matter that you are a private person or not

    firstly

    (a) Vat registered to non-vat registered ( like a dealer to you)

    The dealer is required under law to charge VAT on a sale and you as a private person have no recourse to recover the VAT. Most countries have laws that allow the asset to be seized ( from whoever) but only where they discover the VAT has not been correctly applied to the transaction.( not that the dealer absconded with the VAT) However the legal onnus is the vat registered supplier to remit VAT. Your onnus is to pay the VAT to the dealer thats all. The yacht has NO VAT STATUS. if the dealer defaults on the VAT payments that the dealers and Revenues lookout.

    (b) Subsequent transactions , say private to private

    where both seller and buyer are non-registered for VAT ( ps they could be in business though). then teh seller cannot charge VAT and the buyer cannot recover it. Again this has nothing to do with the VAT status of teh asset. VAT is a tax on sales not a tax on assets. in teh private case a sale occurs but VAT law says that non taxable persons canot charge or recover VAT so no VAT transaction occurs

    (c) Private to vat reg business

    IN this case the seller cannto charge VAT and the buyer MUST account for VAT on purchases. Hence the buyer computes acquisition VAT. the Seller then sells this to (a) and hence MUST charge VAT.

    Again there is no such thing as a VAT status.

    It doesnt matter then you have a VAT paid invoice it means nothing per say. Vat invoices show nothing. They merely serve to show that a taxable person ( in teh VAT sense) applied VAT to the sale. It doesnt mean that the boat is "VAT Paid".

    The point is that transactions between non-registered persons ie thoses not registered for VAT are under no obligation to provide any so called proof of VAT status. If you buy a secondhand boat from a private owner thats been six times owned before looking for teh original VAt invoice is meaningless, its protects nothing and proves nothing, the sale and purchase of teh boat could have subjected to numerous VAT-able transactions in teh meantime or not, but that document proves nothing. The only thing it protects is the VAt registered supplier on the invoice , it does not protect YOU. That why people rabbiting on about getting VAT invoices miss the point completely. The VAT liability remains with the last "taxable person" in the chain. All you have to show is that didnt import the goods from outside the EU.

    We buy cars and other assets privately without this nonsense about VAT. all VAT invoices show is the seller in the transaction "MAY" have charged VAT correctly. A third party VAT invoice, ie one to some previous owner from some previous taxable sale is meaningless. it may help defend your positon but it does NOT mean that VAT has been correctly applied to transactions associated with the yacht. Vat could have become due on any number of transactions since it was originally sold by a dealer. It does not protect you from seizure of teh asset. For example if Revenue decide that VAT was not correctly accounted for in any previous transaction , they have the right to seize the asset proceed from there. Waving a VAT invoice around does nothing

    The most important documents to get are (a) bills of sale esepcially historical ones. and (b) a statement from the buyer that the asset is free of emcumbrances. This is much better then a third party Vat invoice. ( which could easily be forged and has little validity)

    The second thing as a private seller I will not disclose the buying price to you nor am I required to. lets say your paying over the odds for this boat and I present a original sales invoice. I completely undermine my selling position

    ( Does a clothes shop show youits wholesale invoices, I think not).

    What you want for a big value asset sale, is a free from emcumberances undertaking, NOT a meaningless VAT invoice. What you as the buyer wants is that in the event of a problems you can sue to recover should hidden encumberances occur.

    The fact is you cannot establish teh "VAT status"of an asset, it doesnt have one.

  4. #114
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    Default Re: VAT on Boats was Apologies for repeating myself, but...

    Much though not all of what you write is correct GBN

    But you say "if Revenue decide that VAT was not correctly accounted for in any previous transaction , they have the right to seize the asset ". Please show me the law that lets them seize it

    (Of course it is a different law in each eu country; are you in UK? Can you show me the UK law please? Case of champagne offer open to you too. All the many tens of thousands of pages of UK law are online, text searchable. http://www.opsi.gov.uk/legislation/revised for 1987 and prior, and http://www.statutelaw.gov.uk/ for 1988 onwards, so if what you say is true it'll be in there. It isn't, by the way)

  5. #115
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    Default Re: Apologies for repeating myself, but...

    Re: Apologies for repeating myself, but... [Re: jfm]
    #2124672 - 05/01/2009 16:49 Edit Reply Quote Quick Reply

    "As far as the law is concerned, the requirement is upon you to prove the VAT status of the yacht, however most vessels can be dated in some way or another and the manufacture known so obtaining a copy of the original invoice should be relitively easy - if the manufacture does not have that record then HMRC will have a record of the original sale of that vessel and weill under pressure provide to relevant paperwork "



    This is nonsense, please show me such laws and also show me a first hand event where somebody was asked to "prove the VAT status of the vessel"

    Secondly

    "if the manufacture does not have that record then HMRC will have a record of the original sale of that vessel and weill under pressure provide to relevant paperwork"

    absolute horsecodswallop, HMRC has no specifc paperwork relating to any particular VAT transactions, the returns are non specific. You have no clue how VAT accounting works, you are repeating the great "VAT myths about boats"

    As to "stumping up your cash"

    The liability to pay vat and to compute vat lies with any seller , irrespective of whether they are vat-able or not.

    The buyer completes a transaction and hands over money, if the transaction was done at the wrong VAT rate or somebody hasnt paid VAT at SOME stage, then the liability clearly under the law resides with that seller. HMRC could impound the asset irrespective of your VAT invoice, its irrelevant, what is clear is that unless you the buyer commited VAt fraud, you are not liable.

    In foreign waters what you have to protect from is the charge that you are importing the boat into teh EU, not it so called VAT status. Spainish customs have no authority or interest in checking that a UK VAT transaction was correctly applied.

    What they are checking is that you arnt trying to import it.

    Its mis-information like this that has people in a needless tissy about old boats and VAT and its pure mis-information based on forum board heresay and thirds hand nonsense.

  6. #116
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    Default Re: Apologies for repeating myself, but...

    [ QUOTE ]
    it's still worth understnading/establishing whether or not I can be forced to pay money to the government just becuase Mr Smith failed to pay!

    [/ QUOTE ]Yup, that's the point at the end.
    And in this respect (even if I didn't further investigate the subject after the last thread), I rest my case (at least as far as I, F and E are concerned):
    1) it's true that you (the buyer) can't be held liable (as a sort of substitute subject) for the VAT that the seller should have collected, BUT
    2) whatever was sold in a dodgy transaction (the boat) can be seized, unless the transaction can be proved to be legal (or will be made so).

  7. #117
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    Default Re: Apologies for repeating myself, but...

    (Of course it is a different law in each eu country; are you in UK? Can you show me the UK law please? Case of champagne offer open to you too. All the many tens of thousands of pages of UK law are online, text searchable. Here for 1987 and prior, and here for 1988 onwards, so if what you say is true it'll be in there. It isn't, by the way)

    Jfm,

    I draw your attention to http://customs.hmrc.gov.uk/channelsP...yType=document

    HMRC have a general right of seizure in cases of suspected fraud, including VAT and or importation fraud. I am aware that its rarely if ever used in VAT cases unless serious fraud is involved. Its not a specific VAT law issue.

  8. #118
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    Default Re: Apologies for repeating myself, but...

    [ QUOTE ]
    HMRC could impound the asset irrespective of your VAT invoice, its irrelevant, what is clear is that unless you the buyer commited VAt fraud, you are not liable.

    [/ QUOTE ]You seem to say that the asset can be impounded even if the buyer is not liable.
    I assume, unless the buyer can prove the regularity of the transaction, obviously.
    If so, I agree with you, but according to jfm this is not true, at least in UK legislation.
    And I can safely say that he knows what he's talking about.
    That's probably the key point on which most owners around here would be interested to have a clear answer.

    PS: I wrote this post before reading your last reply - which just goes to confirm that I agree with you.

  9. #119
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    Default Re: Apologies for repeating myself, but...

    (Of course it is a different law in each eu country; are you in UK? Can you show me the UK law please? Case of champagne offer open to you too. All the many tens of thousands of pages of UK law are online, text searchable. Here for 1987 and prior, and here for 1988 onwards, so if what you say is true it'll be in there. It isn't, by the way)

    Jfm,

    I draw your attention to http://customs.hmrc.gov.uk/channelsP...yType=document

    HMRC have a general right of seizure in cases of suspected fraud, including VAT and or importation fraud. I am aware that its rarely if ever used in VAT cases unless serious fraud is involved. Its not a specific VAT law issue.

    also heres a snipit

    "The broad range of penalties that can be imposed on people convicted of VAT fraud includes:

    seizure of assets
    jail terms of up to seven years
    heavy fines
    disqualification from being a company director "

    from http://www.hmrc.gov.uk/vat/visits-investigate.htm

    Again this relates to seizures in certain cases, if you have good title to an asset following a sale, then you are right , it cannot be seized. But if you have participted in a vat fraud the asset can be seized.

    I agree with you completely though there is no exposure to a legitimate sale between a buyer and a seller, where both account for vat ( or not if not tax-able) correctly. IN the case of a dealer to private sale a VAt invoice is important as it proves that the vat treatment was correct and that you the buyer didnt enter into a VAT fraud, for private buyers and sellers, some sort of third party VAt invoice is useless and shows nothing relevant to the current sale and the asset will cannot be seized nor CAN be seized under this basis.

    old VAT invoices for original transactions are not required and useless anyway. The only paperwork you need is the ones for teh current transaction and a declaration that the asset is free of emcumberances. ( which come under "useful to have" documents). The main thing is to have bill of sale thats all.

  10. #120
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    Default Re: Apologies for repeating myself, but...

    just to make it clear to the people here

    If you dont participate in a VAT fraud in the current transaction, then the asset is safe. ie if you do a legimate private purchase, but subsequently it is discovered that VAT was not paid, the issue is for that seller, not for you. The issue is that seller owes VAT to HMRC and fines and penalities, you do not. ( again the asset not vat free or vat paid or anything)

    People have reguritated old hearsay and nonsense and in particular nonsense about VAT abroad. The key thing that you have to show abroad is that the boat is legimately in free circulation in the EU. Thats all. Whatever documentation you show is to that end. Its got nothing to do with UK VAT or anyother countries VAT.

    ALso my "seizure comments" were realted to this, ie if you cant prove that the goods are legimately in the EU , then Customs can seize them ( in the UK and elsewhere). This is because you are suspected of a import fraud. But this has nothing to do with having VAT invoices!!!.

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