It is a legal requirement for a UK flagged vessel to wear her ensign as required by the Merchant Shipping Act, when entering or leaving a foreign port and on demand. In most cases the correct version to be worn is the undefaced Red Ensign (the national maritime flag), which denotes the nationality of the vessel. It is recommended that it is worn all times in daylight, especially when near to or in sight of land or another vessel.
In addition to the Red Ensign, there is a White Ensign, a Blue Ensign and there are a number of Red Ensigns with a badge, Blue Ensigns with a badge and a light blue Ensign with a badge. These additional Ensigns are special or privileged Ensigns and may only be worn with permission, which is granted ultimately by the Queen.
A warrant grants this permission and the Ensign must be worn in accordance with the warrant, which will in most cases require the corresponding burgee to be displayed. In most cases the warrant is granted to a Yacht Club, which in turns gives its members permission to wear the Ensign under the conditions of the warrant, by issuing the members with a permit.
Ensign - The Ensign is worn as close to the stern of the vessel as possible, the most senior position for a flag. A UK registered vessel should wear the national maritime flag, the Red Ensign, unless entitled to wear a special or privileged Ensign.
Burgee - The burgee takes the next most senior position on the vessel which is the main masthead. Only one burgee may be flown on the vessel. It is now also common practice to fly the burgee at the starboard spreaders, however, no other flag may be flown above the burgee on the same halyard. Motor boats without a mast can fly the burgee from a staff on the bow or over the bridge / wheelhouse.
Special Ensign - A special or privileged Ensign must be worn in accordance with the warrant and permit governing its use and if required by the warrant and permit should never be worn without its corresponding burgee.
Courtesy Flag and Q Flag - The starboard spreaders are used for signalling. This is where both a national courtesy flag and the Q flag should be flown. You should not fly any other flag above a national courtesy flag on the same halyard.
Note, if you decide to fly your burgee at the starboard spreaders, rather than the masthead and are sailing in the territorial waters of another country you have a dilemma, however you choose to solve this, unless you fly your burgee at the top of the mast you will be contravening one or another element of flag etiquette.
House Flags - House flags are flown from the port spreaders. A house flag may indicate membership of an association (i.e. the RYA House Flag) or society or may be to indicate membership of another club, if the burgee of a more senior club is already being flown. More than one house flag may be flown on the port halyard, but with caution that they are flown in order of seniority.
The Union flag, Welsh Dragon and the Crosses of St Andrew, St George and St Patrick are primarily land flags and should not be flown at sea by cruising yachtsmen.
At sea the cross of St George is the flag of an Admiral and it should therefore not be flown by anyone else, without special dispensation.
A vessel flying the St Andrew’s Cross could be mistaken as saying “my vessel is stopped and making no way through the water” as this is the meaning of code flag M which has the same design and the St Patrick’s Cross could be misinterpreted as code flag V “I require assistance”.
The sizes and condition of flags are important. They should not be tatty and should not hang in the water, but should still be large enough to be seen.
The best advice is "what looks right" but a rough guide can be found at RYA Flag Etiquette
Being ill-informed of your obligations could lead you to cause insult at home or abroad by giving a signal you do not intend to give, or could lead you to a fine for breaking the law. Only with the right flag, correctly positioned, can you to be sure that you are giving the correct message and that any signal you are giving is clear.
Spread the word about flag etiquette and encourage good practice!