There are some large crumbs of comfort to be found in the debris of the Brexit debacle. Yes, there are problems with VAT but there are also some huge opportunities for well informed yachtsmen.
First let’s deal with the VAT issue. Yachts that had VAT paid status and were berthed in EU waters on the 31st Dec 2020 have retained their EU VAT paid status. Yachtsmen must however be able to show documentary evidence of VAT payment and the location of the yacht on the 31st Dec 2020.
Yachts that were in the UK on the 31st Dec 2020 will retain their UK VAT paid status but lose their EU VAT paid status. HMRC has also granted the concession, of retaining UK VAT paid status if the yacht is returned to the UK by the 31st Dec 2021 by the same owner who exported it from the UK in the first place.
For those British owners whose boats are in the Mediterranean and wish to keep them there, the changes present no problems. But what about those yachtsmen who planned to cruise in the Med in the near future or who own British flagged boats that they bought in the EU intending to return to UK waters?
If a British yachtsman was planning on buying a boat in the UK to sail to the Med then paying UK VAT is no longer useful. Therefore the new scenario has created an opportunity. As a third country national (TCN) as far as the EU is concerned a British yachtsman can keep his yacht in EU waters for up to 18 months under the EU’s “Temporary Importation Rule” before having to exit to a non-EU port to reset the temporary importation. Why in heaven’s name would anybody ever pay UK VAT on a yacht if the intention is to sail to the Med? Any well informed yachtsman would buy for export VAT free and then just comply with the 18 month temporary importation rule by moving the yacht to say Montenegro, Turkey, Morocco or Gibraltar before the end of the 18 month period. At Boatshed Gibraltar we have a wide portfolio of VAT paid and non VAT paid yachts. Check our website and chose the one that best fits your circumstances. Are you stuck with an EU VAT paid boat that you can’t now recover to the UK? Speak to us too. Your boat can be sold by Boatshed Gibraltar to another British owner without having to pay VAT or any local Gibraltar taxes.
So much for the benefits that accrue to British owners but why would Brexit bring any benefits to non-British and non-EU owners? Non-British and non-EU citizens have always been able to benefit from the Temporary Importation Rule. However, they were not able to register their boats under Red Ensign directly and had to create a British corporate structure either in the UK or one of the UK’s overseas territories to own the yacht indirectly via the company. Post Brexit the Gibraltar Yacht Registry has been opened to a very wide range of nationalities. Citizens of these countries can now own a Gibraltar Red Ensign flagged yacht personally. Contact Boatshed Gibraltar to check is your country is included in the extensive list of included nationalities.