Brexit, boats and VAT: latest developments | PKF Francis Clark
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Brexit, boats and VAT: latest developments

Organisations representing boat owners and marine businesses are calling for more clarity over post-Brexit customs and VAT arrangements.

It comes despite HMRC announcing a one-year extension to Returned Goods Relief (RGR) on goods – in this case boats – that left the UK/EU more than three years before the end of the transition period and are currently in the EU.

As the end of the transition period nears, the Royal Yachting Association (RYA) and British Marine are pressing for a further extension and more detailed guidance for recreational boaters and the leisure marine industry.

What is the issue?

From the end of next year, Returned Goods Relief (RGR) will only be available for goods returning to the UK provided that RGR conditions are met and that the goods have returned within three years of export.

This will mean that UK owners whose boats have been based in the EU for more than three years will be liable to pay VAT for a second time if they want to bring their boats back home.

Who is affected?

The post-Brexit VAT and customs arrangements will affect boat owners resident in the UK who keep their boats in EU27 countries. A recent survey by the RYA showed that 917,479 recreational boaters cruise in EU27 waters. 

The RYA and British Marine have warned that UK boaters face a choice between being hit with potentially thousands of pounds in extra costs or their boat being stranded in the EU.

Our view

PKF Francis Clark’s marine team provides VAT & Customs helpline services for British Marine and we have been closely involved in discussions with HMRC and the Treasury about this issue.

Partner Simon Anslow said: “The end of the transition period is rapidly approaching, but there still remains a lack of certainty and not an inconsiderable amount of concern amongst both owners and businesses. The revised extension only assists in a small number of cases, leaving fundamental aspects of RGR and ‘VAT Paid Status’ to be addressed, with the prospect of many UK boat owners being left stranded VAT-wise.”

We advise those potentially affected to stay in touch with their respective associations, monitor the press and information releases, and for guidance and assistance in specific cases speak to a member of the PKF Francis Clark marine team.

What are others saying? 

Howard Pridding, RYA’s director of external affairs, said: “We are pleased that the Treasury has listened to our concerns, however a one-year extension remains wholly short of the three-year transitional arrangement that is needed and fulfilling the other conditions of RGR is causing further uncertainty.

“Recreational boating is a seasonal market and moving boats is affected by weather conditions and other safety related issues. The Covid-19 situation additionally complicates this, and boat owners are going to need a realistic transitional period to establish a date of export to qualify for RGR.”

Lesley Robinson, CEO of British Marine, said: “Whilst I appreciate the HM Treasury turning their attention to this issue, there are still fundamental questions and matters that need answering. For example, establishing a ‘date of export’ for a boat to qualify for RGR needs clarifying.

“It is clear that the impact of Covid-19 and travel restrictions means that the one-year extension still falls a long way short of what is required for boaters and marine businesses to make all the necessary arrangements for movement of vessels and future planning.” 

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FEATURING: Simon Anslow
Simon heads up our VAT, Customs & Indirect Tax Team. A broad experience of industry sectors and working with businesses from start-ups through to multi-nationals… read more
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