VAT rule for yachts challenged
The RYA and British Marine are challenging Her Majesty’s Revenue and Customs (HMRC) VAT rules over the repatriation of boats to the UK.
Currently, owners of boats which have been in the UK under present ownership and were in the EU at the end of the Brexit transition period, can qualify for Returned Goods Relief (RGR) and avoid paying a second UK VAT payment if the vessel returns to the UK before 31 December 2021. The RYA and British Marine want this extended to three years. They cite COVID-19 travel restrictions, the 90 days in every 180 days Schengen immigration restriction, insurance restrictions and the length of the sailing season.
They also don’t want UK citizens and residents who bought boats in the EU to be penalised. Currently, owners who bought and permanently kept new and second-hand boats in the EU will have to pay UK VAT on their vessel if they want to bring it back to the UK, even if they’ve already paid EU VAT.
British Marine and the RYA said HMRC provided ‘incorrect advice’ in 2019 and in November 2020, which meant sailors had ‘insufficient warning that they would be liable for VAT on import from 1 January 2021 if they had never owned their boats in the UK.’
They are also asking HMRC to make clear the status of boats that were in Northern Ireland on 31 December 2020 and what the requirements are.
An HMRC spokesperson said it had worked with the pleasure craft sector to understand concerns and ‘help them adjust to the changes’ and would respond shortly.