Zero rated vat

[Tacet]

1 hour ago, Tony Brooks said:

Let us for a moment assume what Alan and a boat sales site said about a purchaser being pursued for VAT on a boat the builder falsely claimed to be zero-rated is broadly correct. It seems to me that the purchaser was faced with choices:

 

Take legal action to get that clause in the contract declared unlawful

Sue the builder or defend the case of the builder suing them for the value of the VAT.

Taking whatever legal action (judicial review?) necessary to have the HMRC pursuit of them for payment illegal.

 

Whichever one you look at, it may well have been cheaper to pay the VAT then legal fees and risk losing and having to pay the other side's costs.

 

It is very much like the arguments about the RCR/RCD, whatever individuals may believe it is only be case law that things get clarified. However it still looks like sharp practice by the builder.

 

No one is saying that the buyer could not owe the seller the equivalent of the VAT; that depends on the contract.

 

What is questioned is whether the boat buyer owes HMRC.  Pragmatism is sometimes appropriate - but if HMRC sent me a claim for someone else's VAT (which is what Alan is saying), I wouldn't pay up.

[Tony Brooks]

10 minutes ago, Tacet said:

No one is saying that the buyer could not owe the seller the equivalent of the VAT; that depends on the contract.

 

What is questioned is whether the boat buyer owes HMRC.  Pragmatism is sometimes appropriate - but if HMRC sent me a claim for someone else's VAT (which is what Alan is saying), I wouldn't pay up.

 

I suspect that the builder probably sent the owner the documents from HMRC and demanding the owner pay up, and the owner was advised it would be cheaper to pay than fight it. His only get-out would be that it was an unfair contract term, and I suspect that would be difficult to argue. We are only going on what the owner supposedly told someone else, so it's a bit like Chinese whispers - send three and fourpence etc. We are unlikely to ever know exactly what took place, but it must be a warning to others who could potentially be in a similar position.

Edited July 3 by Tony Brooks

[Peanut]

I think it is a straightforward case where, if the OP wants to know, they should ask HMRC for advice, they know the law and what they would expect. Anything else is just conjecture, and could lead to an unwelcome surprise.

Though I agree, some would say, shut up, keep quiet, and it will never happen, which is probably true, unless it does.

[ditchcrawler]

Surly as far as the OP is concerned, IF the boat was zero VAT rated when bought regardless of what has been done internally its still zero rated.

[Alan de Enfield]

5 minutes ago, ditchcrawler said:

Surly as far as the OP is concerned, IF the boat was zero VAT rated when bought regardless of what has been done internally its still zero rated.

 

That's wot I said ages ago.

 

But, was it zero rated ? - as we know a widebeam manufacturer has been making false claims

[ditchcrawler]

8 minutes ago, Alan de Enfield said:

 

That's wot I said ages ago.

 

But, was it zero rated ? - as we know a widebeam manufacturer has been making false claims

I did ask the OP to post details of the boat but I have not seen them 

[Alan de Enfield]

1 minute ago, ditchcrawler said:

I did ask the OP to post details of the boat but I have not seen them 

 

 

As did I in post No2, but the op seems to be expecting answers without providing the information to be able to give advice.

[Tam & Di]

There have been arguments over where the relevant measurements should be taken, and what, if any, allowances are made, but they are pretty tightly defined now. So too has the issue re designed use. So it should be quite straightforward to determine whether or not VAT SHOULD have been paid. Without knowing the critical dimensions of the OP's craft there's not a lot to argue about.  🤔

[blackpearl]

I'm trying to find out the depth this isn't in any of the manuals we have. I know to be zero rated vat it would need to be at least 1.35 metres or more. I don't know how feasible that is.

I am not expecting answers I was just after advise from anyone who's been in a similar situation.

I fully regret even making the post.

[Tony Brooks]

1 minute ago, blackpearl said:

I'm trying to find out the depth this isn't in any of the manuals we have. I know to be zero rated vat it would need to be at least 1.35 metres or more. I don't know how feasible that is.

I am not expecting answers I was just after advise from anyone who's been in a similar situation.

I fully regret even making the post.

 

Well, go to the midpoint along the length, with the boat alongside a very low piece of towpath. Someone lies down and hooks the tag on a steel tape under the wear lip on the baseplate, while someone else measures to the gunnel. Then take off (say) 10mm for the baseplate and 6mm for the walkway plate.

[nicknorman]

Looks like yet another one that thinks this discussion forum is some sort of free professional advice service. Where do they come from!?

Edited July 3 by nicknorman

[ditchcrawler]

22 minutes ago, blackpearl said:

I'm trying to find out the depth this isn't in any of the manuals we have. I know to be zero rated vat it would need to be at least 1.35 metres or more. I don't know how feasible that is.

I am not expecting answers I was just after advise from anyone who's been in a similar situation.

I fully regret even making the post.

Just saying who built the hull and model would probably suffice, unless of course you commissioned a one off

[blackpearl]

4 minutes ago, nicknorman said:

Looks like yet another one that thinks this discussion forum is some sort of free professional advice service. Where do they come from!?

There is no need to be rude.

I certainly don't think this is at all a professional advice service.

I was seeing if anyone had been in a similar situation I wasn't expecting you to solve my problem.

[blackpearl]

9 minutes ago, ditchcrawler said:

Just saying who built the hull and model would probably suffice, unless of course you commissioned a one off

It's a collingwood monarch.

I am trying to get hold of the tonnage certificate that should have been supplied with the boat.

We have liveaboard for over 10 years and outgrew our narrowboat. They are so much easier.

[MtB]

1 minute ago, blackpearl said:

I am trying to get hold of the tonnage certificate that should have been supplied with the boat.

 

Surely 10 minutes with a tape measure would reveal the three measurements required. And far quicker than pestering Collingwood for a certificate!

 

Length of the boat

Beam of the boat

Height of the side decks above the baseplate

 

 

7 minutes ago, blackpearl said:

It's a collingwood monarch.

 

Thanks.

 

From here, the boat appears to be 60ft x 12ft 6in, which in metric is 28.3m x 3.8m.

 

https://www.collingwoodboatbuilders.co.uk/monarch-emperor-range/

 

The side deck height is not mentioned AFAICS, but from the photos looks as though it will be no more than about 1.5m. This gives a gross tonnage of 25.8.

 

 

So easily clears the VAT zero rating threshhold.

 

 

[Alan de Enfield]

31 minutes ago, MtB said:

From here, the boat appears to be 60ft x 12ft 6in, which in metric is 28.3m x 3.8m.

 

From here 60 feet is 18.29 mts

 

So if the gunnel is 1.3 mts then it is ony 14.45 tonnes.

 

(1.3 metres is about 4' 5" which I would suggest is probably a little on the high side for a standard height, but it they build it over-height then it should jsut creep in to 15+)

Edited July 3 by Alan de Enfield

[blackpearl]

I worked out it needed to be at least 1.35m for it to qualify.

I have found that all their boats that qualify come with a tonnage certificate.

I'm unsure whether it is still valid as we have built the interior. I will have to do some more research on that.

Thanks for the help it has been appreciated.

[Alan de Enfield]

14 minutes ago, blackpearl said:

I worked out it needed to be at least 1.35m for it to qualify.

I have found that all their boats that qualify come with a tonnage certificate.

I'm unsure whether it is still valid as we have built the interior. I will have to do some more research on that.

Thanks for the help it has been appreciated.

 

Your fit out will make absolutely no difference to it quailfying or not.

 

If it did when you bought it (and have a certificate to prove it) you have nothing to worry about. If you didn't get a cetificate of tonnage then it would suggest that the builrder is probably lying.

 

Measure your gunnel height as suggested a couple of post ago (deducting 2x steel thiknesses) and then you'll know and can stop worrying about it.

[BoatinglifeupNorth]

33 minutes ago, blackpearl said:

I worked out it needed to be at least 1.35m for it to qualify.

I have found that all their boats that qualify come with a tonnage certificate.

I'm unsure whether it is still valid as we have built the interior. I will have to do some more research on that.

Thanks for the help it has been appreciated.

I don’t really know why it’s such a big issue? You bought a sailaway zero rated so you saved paying the VAT, then you’ve fitted it out and are now trying to sell it. Are you trying to sell the completed boat as VAT exempt? As from what I gather you can’t claim the VAT exemption twice, so why worry about it if you have the original invoice stating “zero Vat” on the sailaway?

Edited July 3 by BoatinglifeupNorth

[Tony Brooks]

8 minutes ago, BoatinglifeupNorth said:

I don’t really know why it’s such a big issue? You bought a sailaway zero rated so you saved paying the VAT, then you’ve fitted it out and are now trying to sell it. Are you trying to sell the completed boat as VAT exempt? As from what I gather you can’t claim the VAT exemption twice, which you did on the sailaway, so why worry about it if you have the original invoice stating “zero Vat” on the sailaway?

 

And as far as I know VAT is not payable in the UK on private sales, even through a broker, I think VAT is only payable on the broker's fee. A VAT certificate would only  be of importance if the boat was being exported or if a broker is refusing to deal with it without the aid certificate.

 

As a buyer, I would be more concerned about the RCR/RCD documentation.

[BoatinglifeupNorth]

3 minutes ago, Tony Brooks said:

 

And as far as I know VAT is not payable in the UK on private sales, even through a broker, I think VAT is only payable on the broker's fee. A VAT certificate would only  be of importance if the boat was being exported or if a broker is refusing to deal with it without the aid certificate.

 

As a buyer, I would be more concerned about the RCR/RCD documentation.

That’s it, the VAT is now really irrelevant as it’s a used product and would only be a concern if taking the boat into Europe. As you say Broker VAT is only charged on their sale commission. 

[Alan de Enfield]

Brokers are being told by their govrning bodies (BMF etc) that they should ensure that the boat not only has the correct RCD / RCR paperwork but has the correct VAT paid certificate, if the OP was not given a zero-rated certificate then maybe the brokers are saying where is your proof of VAT payment ?

 

With only half the story we can only speculate as to what the problem is.

[BoatinglifeupNorth]

13 minutes ago, Alan de Enfield said:

Brokers are being told by their govrning bodies (BMF etc) that they should ensure that the boat not only has the correct RCD / RCR paperwork but has the correct VAT paid certificate, if the OP was not given a zero-rated certificate then maybe the brokers are saying where is your proof of VAT payment ?

 

With only half the story we can only speculate as to what the problem is.

But does it need to be proved as it’s a “used product” so no vat can be charged, it would only come into relevance if the boat was taken out of the country to a EU country, surely?

 How many boaters have the original bill of sale from when their boat was originally purchased by the first owner?

 I know the OP’s boat is less than 3 years old and they’re the original purchasers, so surely they would sill have it along with any hull/build conformity documents?

Edited July 3 by BoatinglifeupNorth

[Alan de Enfield]

The BMF requires its brokers to supply :

 

Evidence by way of original or true copy documents, which have been certified as a true copy by practising lawyer, regarding the VAT status of the Vessel including Builder’s invoices, evidence of VAT payment

 

I know that no one on the forum accepts it, but if VAT has not been paid on a boat, on which VAT is payable the owner, or future owner is rquired to pay it.

[BoatinglifeupNorth]

29 minutes ago, Alan de Enfield said:

The BMF requires its brokers to supply :

 

Evidence by way of original or true copy documents, which have been certified as a true copy by practising lawyer, regarding the VAT status of the Vessel including Builder’s invoices, evidence of VAT payment

 

I know that no one on the forum accepts it, but if VAT has not been paid on a boat, on which VAT is payable the owner, or future owner is rquired to pay it.

You know it doesn’t happen, but if I bought a brand new boat/sailaway a couple of years ago I would of kept all the receipts/invoice/bill if sale and all confirming paperwork that is relevant. 
 A bit different to buying a 20 year old second hand boat.