Boat owners, whose vessels were in the EU at the end of the Brexit transition period, now have until 30 June 2022 to qualify for Returned Goods Relief (RGR)
UK sailors with boats in Europe have been given an extra six months to qualify for Returned Goods Relief (RGR).
At the end of last year, Her Majesty’s Revenue and Customs (HMRC) announced that 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, could avoid paying a second VAT payment if the vessel returned to the UK before 31 December 2021.
This applied regardless of when the boat left the UK.
Now, following lobbying by the RYA and British Marine, HMRC has announced a six-month extension to the one year grace period.
This means cruisers have until 30 June 2022 to bring their boats back to the UK from Europe to avoid paying a second UK VAT payment.
Both the RYA and British Marine argued that the one year grace period was not sufficient, given the COVID-19 restrictions across Europe and the UK, the Schengen area immigration restrictions (which only allows UK visitors to remain in Schengen countries for 90 days in every 180 day period), insurance restrictions and the length of sailing season.
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Commenting on the announcement, the RYA director of external affairs, Howard Pridding, said: ‘Following many months of dialogue with officials we welcome this news from HMRC. The extension of 30 June 2022 for boat owners to repatriate their vessels will allow many recreational boaters the opportunity to return to the UK without incurring additional VAT costs.
‘The HMRC announcement is timely, as we have seen additional concerns from members about the new restrictions on leaving the UK announced last week,’ he added.
‘We will continue our constructive dialogue with HMRC on all outstanding post-Brexit issues, including the repatriation of boats that have not been in the UK under their current ownership, and look forward to receiving a full response from the HMRC chief executive on the points that we have raised,’ said Pridding.
The CEO of British Marine, Lesley Robinson said although they had ‘requested and set out a strong case for a 3-year RGR transition period, the 6-month extension is welcomed.’
‘However, given the current restrictions on international travel, we hope HMRC will demonstrate flexibility to the extension to allow all UK boat owners to return their boats in a safe weather window. This flexibility would also be welcomed by UK boat retailers and brokers in order to keep fulfilling the rising demand for second-hand boats in the UK,’ she added.
Owners who bought their vessels in the EU and have not located their boat in the UK during current ownership will have to pay UK VAT on their boat if they want to bring it back to the UK, even if they have paid EU VAT.
This applies to new and second hand boats.
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Source: Yachting Monthly