The Royal Yachting Association (RYA) has expressed its disappointment as the British Government’s rejection of its proposal to allow recreational boat owners, established in the UK and who lawfully purchased and kept their boat in the EU at the time the UK was an EU member, to be eligible for Returned Goods Relief (RGR).
The RYA, British Marine, Association of Brokers and Yacht Agents, and the Cruising Association were informed of the decision at a meeting with HMRC last Wednesday (14 December).
On 25 April 2019, the Government originally said: “The intended UK policy is that a UK vessel will not lose its status as VAT paid in the UK because it is outside UK territorial waters on EU Exit Day. When the vessel returns to the UK the person responsible for the vessel can claim Returned Goods Relief.”
On 03 November 2020, the Government reaffirmed: “If a vessel was re-imported during 2021, it would be sufficient to show that any sale or transfer or ownership had been made in compliance with [EU] VAT legislation.”
Despite two separate confirmations by the government in April 2019 and November 2020, the RYA says, it was not until 17 December 2020 that HMRC stated the prior advice was incorrect and that it would be unable to apply an easement for returning vessels after Brexit.
This gave boat owners just 14 days to re-base their boats to the UK to avoid a second VAT charge. Given the distance, winter weather conditions and above all COVID travel restrictions, this was not only unrealistic but for most it was simply impossible, the RYA says.
Mel Hide, RYA director of external affairs, said: “This proposal has been with the Government since January 2022 following the successful case we made for an easement of the three-year RGR condition. It is therefore a deeply disappointing outcome and falls well short of resolving the issue for those who have been caught out by incorrect advice provided by the Government.
“It would also seem to fall short of the Government commitment to assist UK industry as we forge our future outside of the EU. We must now consider what action we can collectively take to seek a better outcome.”
Lesley Robinson, CEO of British Marine, commented: “This is obviously very disappointing news in light of the previous commitments from Government to support UK boat owners bringing their vessels back to the UK. We will continue to work with our strategic partners to challenge this decision and press for a change in policy.”
