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  1. #1
    syd's Avatar
    syd is offline Registered User
    Location : Boat's in Chatham, I'm in Essex
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    Default Proof of VAT paid

    Not sure if this has been dealt wiyh before but if you bought an American boat from a dealer second hand and didn't get the VAT paid docs what do you do ?
    Has the dealer got to supply proof ?

    Syd
    I can resist anything, except temptation.

  2. #2
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    No he doesnt have to offer them, but it would have been more helpful if he had them. I assume this is a UK/CE plated boat, and not some grey import, or private import, in which case I think things might be alot more tricky.
    Crudely, if the boat was sold by a proper dealer in the UK, then VAT would have been charged on that first transaction. To that end , HMRC doesnt seem to find any point in rushing about checking bits of paper. It is possible that the original dealer can make you a certified copy of the original invoice.
    So, unless HMRC have some reason to be highly suspiscious, they are not going to bother you. You have two smaller risks. One is when selling, you find a reluctance from buyers bcz you dont have this document (though they dont really need it either); the other is it is slightly possible that some foreign customs guy would give you some grief for not having docs that he would like to see.
    So, as long as you are sure it was a normal first sale through a registered dealer, I wouldnt lose too much sleep.

  3. #3
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    If you bought it from a "dealer" then it is unlikely that he is not VAT registered so there should be a VAT invoice from him on the sale to you. If he is VAT registered and has not accounted for VAT on the sale, he has committed an offence.

    If, however, he is a broker (that is a representative for the owner) then you will not get a VAT invoice from him, but there would have been one originally when the boat was first sold in the EU. However, these things often get lost and as gigm says the chances of there being a problem if it was legitimately imported are very small. If you did buy through a broker, then your contract is with the private owner and no VAT is due on the transaction.

    On the other hand, if it was imported by an individual, it is the individual's responsibility to pay VAT. If that was not done, HMRC could pursue payment. The importer should also have got a CE mark. It is illegal (in general terms) to sell a boat without a CE mark, so if the boat does not have it, your seller has committed an offence.

    Suggest you get on the RYA site as there is good information on buying a second hand boat and particularly on importingboats with the associated legislation.

  4. #4
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    Put simply - no vat receipt available - do not purchase!

    You need one to prove Vat has been paid and as and when you come to sell it again it will be a much easier task, especially if you want to p/x it against a boat from a dealer of any repute.

  5. #5
    mikef's Avatar
    mikef is offline Registered User
    Location : Chesham, Bucks
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    Default

    Quote Originally Posted by Imperial One View Post
    Put simply - no vat receipt available - do not purchase!

    You need one to prove Vat has been paid and as and when you come to sell it again it will be a much easier task, especially if you want to p/x it against a boat from a dealer of any repute.
    You may have opened a can of worms there. As it happens, from the practical point of view, I agree with you 100%, not to mention also that if you or a future owner of your boat want to finance it, the finance co will probably want to see proof of VAT paid docs. However, there are some forumites who will argue that owners of a secondhand boat have no liability to prove that VAT has been paid on their boat any more than the owner of a secondhand car has to prove that VAT was paid on his car

  6. #6
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    Quote Originally Posted by mikef View Post
    You may have opened a can of worms there. As it happens, from the practical point of view, I agree with you 100%, not to mention also that if you or a future owner of your boat want to finance it, the finance co will probably want to see proof of VAT paid docs. However, there are some forumites who will argue that owners of a secondhand boat have no liability to prove that VAT has been paid on their boat any more than the owner of a secondhand car has to prove that VAT was paid on his car
    Sweeping statements like this do not help the OP. This is just as silly as saying that the VAT invoice is not important so ignore it.

    As we have debated endlessly, it all depends on the circumstances surrounding the transaction. If it is a sale between two EU residents of a boat that was built in the EU and has always been in the EU, and will remain in the EU then it is of little relevance. If this were not the case there would not be a market for secondhand boats.

    If on the other hand, as in the OPs scenario, the transaction will be between a trader and a private person then it is potentially a chargeable event. Also as the boat was built outside the EU, at the point of importation duty, VAT and CE mark will have been necessary, whether it be imported by way of trade or for private use - the requirements are the same. Therefore lack of documentation is suspicious. Extra care is needed in establishing the history of the boat, because of the potential penalties if the law has been broken.

    There is nothing clever or difficult about this. A subscription to the RYA gives access to vast amounts of advice on the subject and a further 6.95 buys you a book which goes through the process of buying and selling a boat in great detail. Any intelligent buyer should have no difficulty in understanding where the pitfalls lie, and if they get stuck the subscription will give them access to the legal department.

    There are of course, situations where there are additional issues, particularly when a boat has been outside the EU at some time in its history or has been owned by a corporate body, but again the basic rules are straightforward, just that unravelling history can be difficult.

    And, yes, of course the advice is to walk away if you are unhappy about the history of the boat, in just the same way as you walk if there are unresolved issues about the physical condition.

  7. #7
    Adrianwool is offline Registered User
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    As Tranona states, this has been 'debated to death' on this forum, whatever the 'rights and wrongs' are, you cannot (in my humble opinion) have too much provenace for any one boat. Good for zealous customs officials, (especially foreign ones), 'comfort factor' for a potential purchaser when you come to sell on, which generally makes for an easier deal with higher returns.

  8. #8
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    Quote Originally Posted by Imperial One View Post
    Put simply - no vat receipt available - do not purchase!

    You need one to prove Vat has been paid and as and when you come to sell it again it will be a much easier task, especially if you want to p/x it against a boat from a dealer of any repute.
    That is too sweeping a statement. I admit I would not buy the present boat without the VAT doc, but that was bcz for me it was a noticeable amount of money. But I cant say I bothered much about it on smaller/cheaper boats.

    You do not need a VAT doc to sell the boat as a private individual
    Tranona, is that correct that if a dealer sells (his own) second hand boat, he charges VAT on that, and it is shown on any invoice?

  9. #9
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    I do not think it is too sweeping a statement at all.

    As a broker and dealer I will not take any boat, no matter how big or small in part exchange unless we have full provenance on it and this will always include its Vat status, be that vat paid or Vat free.

    As said elsewhere in this thread, this topic has been debated to death but in simple terms, if you want to buy a boat with little or no paperwork from a private seller then it's your risk.

    And it is a risk, especially if you go over the channel - you may well get asked to prove vat payment be it on a trailed boat or one on her own bottom. If you stay in the local waters you probably will not be asked to prove the vat situation.....until you come to sell it again.

    As an example of why I take this position, we have recently sold one boat where the paperwork chain with it included a letter from HMRC asking the previous but one owner to prove the Vat situation as they had 'noticed' the boat being used in a UK Harbour. Fortunately the Vat paperwork existed (actually from our original invoice!) but even here in what many consider waters unpoliced by the HMRC, you may well get asked for proof.

    It would be interesting to see the posts on here about me (or my fellow brokers) if I sold a boat with no Vat paperwork....how acceptable a situation would that be I wonder.

    I accept all other peoples views but as a concientious broker I stay with my advice of 'no paperwork proving Vat payment, or not, then do not purchase'.

  10. #10
    PaulGooch's Avatar
    PaulGooch is offline Registered User
    Location : Home = Norfolk, Boat = The Wash
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    Quote Originally Posted by gjgm View Post
    That is too sweeping a statement. I admit I would not buy the present boat without the VAT doc, but that was bcz for me it was a noticeable amount of money. But I cant say I bothered much about it on smaller/cheaper boats.

    You do not need a VAT doc to sell the boat as a private individual
    Tranona, is that correct that if a dealer sells (his own) second hand boat, he charges VAT on that, and it is shown on any invoice?
    A boat purchased from a VAT registered dealer (not acting as a broker) should show VAT separately listed.

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