Asisa Health Insurance
Absolute Boat Care
Palma Shipwrights & Joiners
Miller Marine
Versilia Supply Service
Breaking News
Home > Legal & Financial > UK yacht owners with boats overseas granted one-year VAT extension

UK yacht owners with boats overseas granted one-year VAT extension

UK yacht owners have been granted another year to avoid paying VAT twice on boats returning to the UK, according to the Financial Times newspaper.

”Complex customs rules would have meant that owners of UK-owned boats berthed in the EU for up to the last three years would have to return to the UK by the December 31st 2020 to avoid paying VAT twice. However, after the Financial Times contacted HM Revenue and Customs the government publically announced it has extended the date until December 31st 2021.”

British yachts and boats can travel freely in UK and EU waters without paying VAT and Customs duties if VAT has already been paid in the EU but this is scheduled to finish after the transition period to leave the EU at the end of 2020. Yachts returning to the UK were likely to lose the HMRC returned goods relief which is available for boats and exported on a temporary basis and returned to the UK within three years.

Howard Pridding, director of external affairs for the Royal Yachting Association (RYA), the UK’s national boating consumer organisation, commented to the FT: “We welcome the decision, but it’s not long enough as coronavirus travel restrictions make it very difficult for owners to return boats to the UK by the end of 2021.”

The RYA and British Marine, the UK marine industry association, have been pursuing the complex issue for over three years with HMRC pointing out the issues for owners and the industry and were lobbying for a three-year extension, significantly more than the one year just announced by HMRC.

In a joint statement early in October, the RYA and British Marine said; ”UK boaters face a choice between being hit with potentially thousands of pounds in extra costs or their boat being stranded in the EU after the end of the Brexit transition period unless the government acts quickly. This will mean that, after the transition period, all boat owners established in the UK whose boats have not been in the UK in the last three years will pay VAT for a second time if they want to bring their boats back to the UK.

“Failure to resolve issues relating to the post-Brexit implementation of RGR into UK law before 31 December would also deliver a significant hit to the second-hand boat market and marine industry in the UK, which is already fighting to recover from Covid-19.”

Lesley Robinson, CEO of British Marine, commented: ”This is now a serious situation and it will create turmoil in the second-hand boat market. For UK brokers and distributors in the marine industry there remains doubt and confusion as to where they stand. There is a high probability that current VAT paid boats (that will no longer have EU27 VAT Paid Status after Brexit) will be devalued and become less attractive to buyers, which will impact businesses and ultimately jobs in the industry.”