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VAT


Gary Peacock

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17 minutes ago, ditchcrawler said:

VAT is only payable once, so provided the original owner paid it then its ok for ever more

Yes but few original owners accept that their new purchase has instantly lost 17.5%. Rather they want to base resale value on the inclusive price which they paid (understandably) so VAT is included, to one extent or another, in the asking price.

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19 minutes ago, frahkn said:

Yes but few original owners accept that their new purchase has instantly lost 17.5%. Rather they want to base resale value on the inclusive price which they paid (understandably) so VAT is included, to one extent or another, in the asking price.

No its not, its the owner getting more money for the boat, no more VAT is paid

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56 minutes ago, Mick in Bangkok said:

Haven’t lived in UK for many years so would like to clarify would one only need to pay VAT on a new narrow boat or if I were to purchase a second hand vessel as a live aboard would I also need to pay?

A secondhand boat may be subject to VAT IF it (for example) was owned by a company, or anyone VAT registered, who had reclaimed the VAT from HMRC.

 

The only way to be absolutely sure is to see the VAT paid certificate (or the original builders invoice showing VAT paid) amongst the ‘ships papers’.

Unfortunately you will rarely get much in the way of ‘ships papers’ with an Inland Waterways purchase, “officialdom - goes against the grain you know”

Even if the boat is not VAT paid you are unlikely to get ‘caught’, but if you do then you are responsible for its payment.

Liveaboard or not does not alone dictate if VAT should be paid – it is the ‘size’ of the boat and then the usage that determines it VAT status.

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1 hour ago, ditchcrawler said:

VAT is only payable once, so provided the original owner paid it then its ok for ever more

Unless you want to take the boat to another EU country. If you cannot prove that the VAT has already been paid, then you may have to pay it again.

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40 minutes ago, David Mack said:

Unless you want to take the boat to another EU country. If you cannot prove that the VAT has already been paid, then you may have to pay it again.

As discussed in detail the last time the question was asked

I had exactly that problem when I purchased a boat in Croatia without a VAT or RCD certificate. (As I have mentioned a number of times)

Got about £60,000 knocked off the price, and just cost a 'contribution to the coffee fund' to the Croatian customs to get the necessary paperwork.

Form T2L "issued retrospectively"

 

 

Lagoon 380 T2L.pdf

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2 hours ago, ditchcrawler said:

No its not, its the owner getting more money for the boat, no more VAT is paid

To me £10,000 is £10,000 whatever it's called so if a seller wants an additional £10,000 to make up for the VAT he paid, it doesn't matter a lot what he calls it.

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I thought about this a bit more and I suppose if you buy an ex-hire boat from the hire company you would have to pay VAT on the purchase but I doubt that would be in addition to the asking price, I would expect them to quote a selling price including VAT. But I am not a tax advisory so I could be a million miles off with that one.

 

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10 hours ago, frahkn said:

Yes but few original owners accept that their new purchase has instantly lost 17.5%. Rather they want to base resale value on the inclusive price which they paid (understandably) so VAT is included, to one extent or another, in the asking price.

ehh??

 

so you think that the resale market price for something that cost £100 plus £20 vat and is effectively brand new should be £100 and the poor sucker who bought it for £120 should take the hit?

clearly you have no concept of what vat is and how it affects prices, new and secondhand.

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I think he has been listening to people talking about driving cars off the forecourt and immediately writing off 20%. It might happen but it's nothing to do with VAT, more to do with you not being the first person to sit in the drivers seat when it comes up for sale and the salespersons need to make a profit on the transaction.

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2 hours ago, Murflynn said:

ehh??

 

so you think that the resale market price for something that cost £100 plus £20 vat and is effectively brand new should be £100 and the poor sucker who bought it for £120 should take the hit?

clearly you have no concept of what vat is and how it affects prices, new and secondhand.

Perhaps you are correct about my conceptual failings, though you might have expressed it more politely.

Consider this:-

A builder constructs a boat, the sale price includes

Material costs                 £100

Labour                          £100

Workshop overheads      £100

Sundry                         £100

A profit margin              £100

VAT                              £100

Total                            £600

He sells the boat for the £600, the costs have been honestly calculated so the builder gets only £100 on the deal. Is the boat, in the purchasers hands, worth £600 (how?), £500 (arguable) or £400 (what a buyer might say).

Anyway the resale market price is what the seller says it is, the actual price is what a buyer will pay.

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5 hours ago, frahkn said:

Is the boat, in the purchasers hands, worth £600 (how?)

Yes. Quite simply because that’s what he paid for it. 

The boat is now second-hand so he couldn’t sell it for £600, as for that money a purchaser could buy a new one. But that has nothing whatsoever to do with VAT. 

If I buy a new drill for £120 including two batteries and a charger then that’s the value of those goods. Because that’s what I paid for them. How much the retailer made on the sale is irrelevant to me. VAT is nothing more than a consumer tax - a method whereby the government of the day can benefit from a 20% take of everything that’s sold. It used to be called Purchase Tax. In America it’s called Sales Tax. The price the consumer pays includes that tax and that’s the value of the goods. 

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4 hours ago, WotEver said:

Yes. Quite simply because that’s what he paid for it. 

The boat is now second-hand so he couldn’t sell it for £600, as for that money a purchaser could buy a new one. But that has nothing whatsoever to do with VAT. 

If I buy a new drill for £120 including two batteries and a charger then that’s the value of those goods. Because that’s what I paid for them. How much the retailer made on the sale is irrelevant to me. VAT is nothing more than a consumer tax - a method whereby the government of the day can benefit from a 20% take of everything that’s sold. It used to be called Purchase Tax. In America it’s called Sales Tax. The price the consumer pays includes that tax and that’s the value of the goods. 

Well it's a point of view.

If you glance back to post 76 you will see that mine is not too different. I think that if you were selling the drill, unused, next day, you would attempt to recover your £120. If I was willing to pay you £110 some of that £110 would represent the VAT which you paid although neither of us would be calling it that. If the purchase had been VAT free you would probably have asked only £100 and I paid only £90, but the drill would have been exactly the same.

As to "true value" economists would give you various figures (and that's only classical economists - marxists would say the value was the 'socially necessary labour time' expended in the production of the drill).

Either way, VAT influences cost but has nothing to do with value (IMHO). I can't accept that the value of goods changes every time the government changes the rate of VAT, though obviously the price does.

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3 hours ago, frahkn said:

Well it's a point of view.

If you glance back to post 76 you will see that mine is not too different. I think that if you were selling the drill, unused, next day, you would attempt to recover your £120. If I was willing to pay you £110 some of that £110 would represent the VAT which you paid although neither of us would be calling it that. If the purchase had been VAT free you would probably have asked only £100 and I paid only £90, but the drill would have been exactly the same.

As to "true value" economists would give you various figures (and that's only classical economists - marxists would say the value was the 'socially necessary labour time' expended in the production of the drill).

Either way, VAT influences cost but has nothing to do with value (IMHO). I can't accept that the value of goods changes every time the government changes the rate of VAT, though obviously the price does.

there's nothing so interesting as stating the bleeding obvious.  :banghead:

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11 hours ago, Murflynn said:

there's nothing so interesting as stating the bleeding obvious.  :banghead:

I hope you are not trying to improve your politeness, because you are not making it.

I stated the obvious several posts ago, it was obvious (and correct) before you felt the need to add your tuppence worth. 

Nevertheless, thank you for your profound contribution to the discussion. It means a lot to me.

Edited by frahkn
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6 hours ago, frahkn said:

I hope you are not trying to improve your politeness, because you are not making it.

I stated the obvious several posts ago, it was obvious (and correct) before you felt the need to add your tuppence worth. 

Nevertheless, thank you for your profound contribution to the discussion. It means a lot to me.

love you too  :giggles:

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