At a recent meeting with HMRC (14 December 2022), the RYA, British Marine, Association of Brokers and Yacht Agents, and the Cruising Association were informed of the Government’s decision to reject a proposal by the RYA allowing recreational boat owners, established in the UK, 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).
On 25 April 2019, the Government confirmed: “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.”
It was not until 17 December 2020 that HMRC stated that the advice it gave on 03 November 2020 was incorrect and that it would be unable to apply an easement for returning vessels after the UK left the EU. This gave boat owners just 14 days to rebase 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.
Following discussions between HMRC and the RYA in November 2021, and in an effort to remedy the incorrect advice they had been given, the RYA submitted a written proposal to HMRC in January 2022. The proposal was intended to provide an easement of the RGR import/export condition for owners whose boats were not eligible for RGR because their boats were in the EU at the end of the Transition Period and had never been in the UK under their ownership.
Following the proposal, disappointingly, no further changes were made to the RGR eligibility conditions, and they remain as they were prior to the 14 December.
Mel Hide, RYA Director of External Affairs, said: “The Government have had this proposal since January 2022 following our successful lobbying made for an easement of the 3-year RGR condition. Disappointedly, this outcome does not resolve the issue for those who have been caught out by incorrect advice provided by the Government and falls short of the Government commitment to assist UK industry as we forge our future outside of the EU which is deeply disappointing. We are considering what action we can now collectively take to seek a better result.”
Lesley Robinson, CEO, 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.”
If you are an RYA Member and have a question regarding RGR, you can email the RYA Cruising team: cruising@rya.org.uk.
