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  1. #1
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    Mar 2002
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    Default MBM and VAT advice

    Do I dare write this...
    "On the proof of VAT issue,you could sell the boat without this,provided the purchaser was made aware that this is missing, and that they could be liable for payment of VAT at the used boat value"
    (Second hand ten year old boat.)
    Right class;who has been paying attention this week?Hands up who knows under what circumstances?If any?
    (Put your hand down JFM, or it is extra lines for you)

  2. #2
    ari's Avatar
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    Presumably when a foreign customs official demands proof, you haven't got it, and he demands payment?

    What do I win?
    Ari

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    If a man speaks in a forest, and there is no woman to hear him, is he still wrong..?

  3. #3
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    I'll have a shot to see if I can get the gold star rather than the lines.

    One situation is if the boat has been imported from outside the EU and the importer did not pay. Liability is still with him, but also attaches to the boat so HMRC could seize the boat in lieu of payment - which would be based on the value at time of import, not its current value.

    As its late at night I get to keep the gold star until tomorrow when an expert will come along and blow me out of the water.

  4. #4
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    Well I cant work it out either! I thought you couldnt be liable at the current value of the boat?
    I guess you might get asked for VAT abroad (but I thought they had no claim if the boat was UK kept?)
    I thought the overall conclusion was other than smuggling, you cant be liable for a VAT event that you were not involved in (ie the original purchase).
    The article does suggest it is unlikely to happen, but the buyer will probably want a heavy discount because he may have to pay VAT.
    I thought this was just the false impression we were trying to avoid...

    I had better start my lines....

  5. #5
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    My understanding, which may of course be wrong, is that although YOU can't be involved in a VAT transaction from the past, the boat CAN - and as it's now your boat, it's now your problem.

    I also thought the VAT due was based on the VAT due when it should have first been paid unless the VAT at that point was legally and legitimately reclaimed, in which case it follows down the line until the point where the VAT could NOT have been legitimately reclaimed - and that's the level it's due at.

    Bit like used vans.... They can be VAT qualifying for years if the people buying them recover the VAT - Then someone non-VAT registered buys it, pays the VAT and presto - VAT paid, no more VAT liability.
    Why can't we work 2 days a week and boat the other 5????

  6. #6
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    Quote Originally Posted by ontheplane View Post
    I also thought the VAT due was based on the VAT due when it should have first been paid unless the VAT at that point was legally and legitimately reclaimed, in which case it follows down the line until the point where the VAT could NOT have been legitimately reclaimed - and that's the level it's due at.
    Imho, gold star to otp for getting that exactly right in the face of solicitor's and troubledwaters advice on t'other thread and MBY that evaded VAT is only payable at 20% of the market value of the contraband goods at the time you get caught. IE the tax laws offer you a financial incentive and reward for evading VAT.

  7. #7
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    Quote Originally Posted by jfm View Post
    Imho, gold star to otp for getting that exactly right in the face of solicitor's and troubledwaters advice on t'other thread and MBY that evaded VAT is only payable at 20% of the market value of the contraband goods at the time you get caught. IE the tax laws offer you a financial incentive and reward for evading VAT.
    Right, but if we assume the guy has owned the boat since new (implied, but confirmed), had the docs but has lost them over the ten years, HMRC arent going to come after the next owner for VAT at the now current price, unless in some very very rare situation there has been some dodgy footwork that concerns HMRC back in the past?
    My reading of the article is that they might, even if unlikely, and so buyers will want to negotiate the price down.
    I thought that the message ought to have been that there is all but no VAT risk, and so no need look to lower your bid...
    Last edited by gjgm; 15-01-12 at 08:49.

  8. #8
    ari's Avatar
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    Quote Originally Posted by gjgm View Post
    I thought that the message ought to have been that there is all but no VAT risk, and so no need look to lower your bid...
    And fingers crossed that a future buyer feels the same way, or you'll be the one that loses out due to the first owner having lost his paperwork?
    Ari

    ---------------------------------

    If a man speaks in a forest, and there is no woman to hear him, is he still wrong..?

  9. #9
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    Quote Originally Posted by ari View Post
    And fingers crossed that a future buyer feels the same way, or you'll be the one that loses out due to the first owner having lost his paperwork?
    OK, but if there isnt a meaningful risk, why the urban myth.

  10. #10
    ari's Avatar
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    Would you do it? Pay full whack for a boat without proof of VAT and hope that when you come to sell, your buyer feels the same way?
    Ari

    ---------------------------------

    If a man speaks in a forest, and there is no woman to hear him, is he still wrong..?

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