When a newly manufactured yacht is exported, it is quite common that larger vessels will be sold with additional watercraft as part of a single supply…
On 29 December 2021, HMRC updated its guidance on re-importing goods to reflect the relaxation of the three-year time limit. Details can be found in the section “Normal time limits for returning goods”.
This appears to be good news for UK businesses and boat owners, but perhaps not quite as generous as first mooted. The ‘three-year rule’ is not automatically waived for returning pleasure craft as has been widely reported, but still subject to certain conditions being met and an application required to be made to HMRC.
On the assumption that the person qualifies (VAT status on original departure / same ownership on return / no material change), the options are as follows:
- Can return within 3 years as usual.
- Can return after three years but before 30 June 2022
- Can return after 3 years where they could not return goods within 3 years of export because of circumstances beyond the control of the person returning the goods. (The old rule that was always extant). (Need to apply for a waiver).
- All the above plus:
- Personal property of a UK resident being returned to the UK for either personal use of a UK resident person or meeting household needs of a UK resident person. (Includes pleasurecraft).
(If over 3 years must apply for a waiver). But this option can be used after the 30 June 2022 shut off date. It would make sense if this did not require a waiver, but the guidance states that you do!
The only exception to the 3 year rule is as follows:
- Goods owned by Crown Servants returning to the UK after their postings overseas (the time limit for Crown Servants is currently 6 years) – Crown Servants include:
- diplomatic staff
- armed forces
- embassy staff
- consular personnel
Clarification is being sought from HMRC as for the requirement to formally apply for and seek a waiver in respect of 3yr+ eligible returning pleasurecraft, as this appears to run contrary to the previous messaging and potential to stretch HMRC’s already limited resources.