There will be a new relationship between the UK and the EU in 2021 with the changes in effect as of 2300 hours UTC on 31 December 2020 when the transition period ends.
What we know now
Brexit - what happens next? outlines what the end of the transition period means for recreational boating and what we currently understand the arrangements will be from 1 January 2021. This is of course a fluid situation, given that in mid December 2020 it was still undecided whether there or not there would be a future relationship deal.
As 2021 progresses we will learn what Brexit means in reality. Our advice and guidance will be updated as and when we learn more about the changes in practice.
Customs and VAT issues
We will continue to lobby MPs on the unacceptable stance the Government and HMRC have taken, by making Returned Goods Relief unavailable to anyone whose boat hasn’t been in the UK during their ownership, but who has complied with the conditions in all respects while the UK was a member of the EU.
Returned Goods Relief
The UK RGR scheme may be appropriate for the movement of commercial goods. For recreational boat owners, it can result in double taxation. It is important that the customs and VAT relief arrangements applied after the Transition Period ends are fair and reasonable. The arrangements do not currently meet this standard.
HMRC has the ability to waive the requirement for a boat to return within 3 years condition but has stated that this will only be done if HMRC considers it reasonable to do so in view of any exceptional circumstances which the owners of goods can present and is only done on a case by case basis. Despite have stated in a meeting with the RYA that the return within 3 years condition will be strictly enforced, HMRC claims its operational policy on this has not changed.
The RYA will continue to seek clarification from HMRC and will lobby MPs with a view to achieving fair and reasonable conditions that private recreational boats must meet in order to return to the UK without VAT and import duty becoming chargeable.
Things Stand - December 2020
Since the Withdrawal Agreement was ratified at the beginning of 2020, the RYA has been working to establish what measures the government intends to put in place for VAT, import duty, Returned Good Relief (RGR) and Temporary Admission (TA) and what the future holds for recreational boaters, instructors, Recognised Training Centres (RTCs) and others who work abroad with their RYA qualifications at the end of the Transition Period (TP).
We have strived over many months to brief officials on the seasonal nature of the recreational boating sector and more recently on the negative impact that COVID-19 has had, and is likely to continue to have in 2021, on the movement of boats and people throughout Europe. We continue to lobby government on the following issues of concern to RYA members.
Customs and VAT issues
1) Geographical Penalties
The RYA estimates that up to 33,000 British people who go boating in Europe could be affected by Customs and VAT issues which would be applied to them retrospectively. These are ordinary people who, as UK nationals and residents, have followed the rules and utilised freedoms that were available to them from the UK’s membership of the EU.
Recreational boat owners are struggling to comprehend why the UK Government is seemingly penalising them for simply having utilised the freedom of movement afforded to them by the UK’s membership of the EU. This included the right to buy and keep their boats wherever in the EU they wished, as long as the VAT was paid. Boat owners did not have a choice about where the VAT and, if applicable, import duty was paid, as this is set out in the EU VAT Directive and Union Customs Code (UCC).
2) Returned Goods Relief (RGR) Scheme
The UK RGR scheme may be appropriate for the movement of commercial goods but for recreational boat owners, which do not fit into this category, it can result in double taxation which is applied retroactively. It is important that the customs and VAT relief arrangements applied after the Transition Period ends are fair and reasonable. The RYA considers that current proposed arrangements do not currently meet this standard.
The announcement of a one-year transitional arrangement in respect of the RGR scheme is welcome, but it does not address the many inequalities resulting from the boat’s geographical location and the owner having no choice about where the VAT was paid (this is specified in the UCC and the VAT Directive). The fact is that recreational boats are intended to be transport and accommodation and as such will naturally travel across international borders. The owners of these boats bought them in good faith and paid all taxes and customs charges that were owed at that time. We do not believe it is right to apply further taxes to boat owners after they have purchased their boat as a result of a change in international agreements.
3) Inconsistent advice from HMRC
In April 2019 HMRC advised the RYA that, “In the event of the UK, leaving the EU without a deal, HMRC will allow RGR for any pleasure craft, which has union paid status and belongs in the UK because of registration or the nationality/place of establishment of the owner. We believe that temporary admission should allow any without those qualifications to land in the UK.”
This indicated to the RYA that boats would either be eligible for RGR or for TA as the return within 3 years condition of RGR had, in practice, generally been waived by HMRC for recreational craft. The statement was therefore taken at face value and was understood to mean that a boat which belongs to the UK could return to the UK without paying VAT and import duty irrespective of whether it had been (or when it was last) in the UK.
The first indication that this would not be the case came from HMRC in a meeting on 14 September 2020 when it was stated that boats that have never been in the UK will not be eligible for RGR. It has since come to light that the transitional arrangements do not adequately deal with boats where the VAT was accounted for elsewhere in the EU as required by the VAT Directive and the UCC. This has understandably caused a great deal of uncertainty and difficulty for this community of recreational boat owners. The RYA is concerned that HMRC has provided no explanation as to when or the reasons why the previous policy of waiving the 3-year condition under RGR was changed.
4) Insufficient time to qualify for RGR relief
The short notice of when this advice has been provided coupled with the ongoing travel restrictions, COVID-19 and weather conditions have also limited the ability of recreational boat owners to become compliant with HMRC rules. We believe that the timing of this guidance is insufficient in normal times, it is entirely impractical during a pandemic.
In summary, the key issues with the current approach and treatment of boats returning to the UK are:
- Recreational craft coming to the UK, that are currently in free circulation in the EU have already paid VAT (and duty) according to the legislation currently in force.
- Under Government plans, VAT and import duty can become payable purely by virtue of the vessel having the wrong geographical location at 23:00 UTC on 31 December 2020.
- HMRC has given insufficient notice that to qualify for RGR, boats needed to have been in the UK in the past and that boat owners would need to evidence this.
- Owners that have purchased boats in the EU, which have not been brought to the UK under their ownership have still had insufficient notice of the requirements. Weather and the continuing Covid-19 restrictions in Europe mean they cannot return their boat to the UK by 31 December 2020.
The preferred solution, which is both workable and reasonable, is to allow anyone who is resident in the UK to bring their boat to the UK by 31 December 2021 if it was in free circulation in the EU at 23:00 UTC on 31 December 2020 irrespective of any of the conditions of RGR.
At the moment many thousands of British boat owners are facing enormous personal and financial disruption to their lives despite adhering to the law of their country at that time. In many instances, it may even force them to sell their boat.
As such, the only equable solution is to give boat owners 3 years from the end of TP to bring a boat they own and which is lying in the VAT territory of the EU to UK without VAT and import duty becoming payable regardless of whether it was in the UK previously. This would set the date for export at the end of TP when the UK leaves the EU. We continue to robustly lobby for this.
The Schengen Agreement
The Schengen Agreement has led most European countries towards building a Europe without borders known as “Schengen Area”. Signed in Luxemburg, initially by only five EU countries, the Schengen Area consists of 26 member countries and encompasses most of the North Mediterranean and North European coastline.
The Minister for the European Neighbourhood and the Americas has told us that the EU has already legislated such that UK nationals will not need a visa when travelling to the Schengen area for short stays of up to 90 days in a rolling 180-day period. This is the standard length of stay that the EU offers to nationals of eligible third countries that offer visa-free travel for EU citizens, in line with existing EU legislation. This will apply after the end of the transition period, on 31 December 2020, to all UK nationals travelling to and within the Schengen area for tourism, to visit friends or family, to attend cultural or sports events or exchanges or any similar activities.
The government has said that as things stand, stays beyond the EU’s 90/180 day visa-free allocation from 1 January 2021 onwards will be for individual Members States to decide and implement through domestic entry rules for non-EU citizens. Under current Schengen rules, UK nationals intending to stay for longer may need a visa or permit form the Member State(s) they intend to visit.
The government published its approach to negotiations on the UK’s future relationship with the EU on 27 February 2020. However, it is disappointing to note that this did not include a specific reference to visa-free travel or reciprocity with the UK’s intended approach to EU citizens travelling to the UK in the future.
From 1 January 2021, EU and non-EU citizens will be treated equally under the UK domestic immigration system for the purposes of tourism and holidays after the end of the transition period, meaning they can come to the UK as visitors for six months without the need to obtain a visa. The UK’s offer of a six month length of stay for visitors from the EU will be the same as its offer to the nationals of all other countries.
Disappointingly, and despite lobbying by a number of sympathetic parliamentarians on our behalf, the government does not appear minded to address an extension to the Schengen Area Agreement. More importantly it would appear the Schengen countries are not willing to make exceptions for the UK when we become a third country.
UK Border Force (a directorate of the Home Office) carries out immigration and customs controls on passengers and goods entering the UK on scheduled flights and vessels arriving at major airports and ports. It is also responsible for immigration and customs controls at any small port that handles maritime traffic (including yachts, Rigid Hull Inflatable Boats (RHIBs), motorboats) referred to as General Maritime (GM).
The Government has long aspired to address the gaps in the data it receives on people arriving in the UK, and to increase the quality, reliability and usefulness of the intelligence generated, to help the Border Force better align its resources to its priorities.
Advance Passenger Information (API) is key to Border Force making well-informed risk-based decisions about operational deployments. The absence of API for GM arrivals, of the type and extent available for General Aviation, is the most significant gap in terms of Border Force’s ability to manage the risk from GM arrivals efficiently and effectively.
Since the Withdrawal Agreement was ratified, the government has been working to develop its ‘Submit an Advanced Voyage Report’ service and the RYA has been closely engaged with that programme since November 2019. It is now going through a period of stringent testing before being released, initially as a voluntary reporting system until it beds in and becomes mandatory.
From what we have seen and tested, the service can be accessed from a PC, laptop or smart phone and is simple to use and comply with once reporting becomes mandatory. For those who sail regularly with the same crew on the same boat, many of the fields can be pre-filled meaning that only the actual arrival and departure voyage details need to be completed. Furthermore, these details can be amended en route.
Eligibility of RYA Qualifications to work in EU
Every national government has the absolute right to accept or indeed to choose not to accept various qualifications for use on vessels within their territories. No amount of lobbying by us to the UK government will change that and indeed the UK government has no authority to insist upon any latitude in this area. In reality, it would be difficult for the UK government to argue for recognition of RYA qualifications in another EU member states when in fact the UK does not allow the use of their qualifications in UK territorial waters.
Each EU member state is entitled to make their own decisions about what qualifications they will accept and we are aware that once UK becomes a third country, a number may well cease to accept UK qualifications on vessels under their respective flags.
RYA professional qualifications (e.g. commercially endorsed certificates of competence) are accepted by the UK Government for use on UK-flagged commercial yachts but such qualifications are not, and never have been, STCW-compliant certificates. As such, RYA professional qualifications are not subject to the mutual-recognition mechanism envisaged in the STCW convention and do not fall with the scope of the EU Directive on the mutual recognition of seafarers’ certificates.
RYA professional qualifications are accepted by several non-UK national administrations for use on vessels flying their flags but this is a matter for each of those administrations individually and there is no obligation on them to do so. The act of leaving the EU will not necessarily change this position, nor will it have any impact on the acceptability of RYA professional qualifications to the UK Government for use on UK-flagged commercial yachts. However, in order to overcome problems where some overseas administrations do not, or in future will not, recognise RYA qualifications, holders of commercially endorsed Yachtmaster Offshore or Ocean Certificates of Competence may wish to explore the route from RYA Yachtmaster to MCA Master, II/2, code vessels less than 200 GT/Officer of the Watch yachts, less than 500 GT. Further details of the route can be found in MSN 1858.
What we have learned so far and what we have been told is published at Brexit - what happens next? This sets out the latest information we have received from HMRC and DG Taxation and Customs Union.
RYA advice on boating abroad - 2021 advice has been added to the following pages:
These pages will continue to be updated on an ongoing basis during 2021 as further information becomes available. If you are boating abroad and you find something has changed or come across something new, please let us know by emailing firstname.lastname@example.org.
Lobbying your MP
To support the RYA’s lobbying work, you are encouraged to contact your local MP directly.
you would like to contact your MP, please follow these steps:
Enter your postcode, or that of your RYA affiliated club, into
the search facility on Parliament.uk to find details
of your local MP
Compose your letter to your MP. If you wish, you can use
this template to put together your letter. Information about the Brexit issues on which the RYA is currently lobbying can be found above.
Save your letter and then either:
a. Print, sign and post your letter to the MP’s House
of Commons address (House of Commons, London, SW1A 0AA); or
b. Attach your letter to an email and then send to
the MP’s Westminster office (Email addresses for MPs can be found on their
profile on Parliament.uk).
If you are an RYA Member and you have
any questions about contacting your MP or the RYA’s ongoing work on Brexit,
please contact email@example.com.
Government 'get ready for new rules in 2021' guidance
Government guidance can be found on GOV.UK.
This includes a tool which enables you to check how to get ready for new rules in 2021. By answering a series of questions about your circumstances you are directed to the information relevant to you.
More guidance needed urges RYA and British Marine as HM Treasury announces 12-month extension on Returned Goods Relief
RYA and British Marine jointly persevere in asking Government to increase 1 year Returned Goods Relief extension period... read more (October 2020)
UK boat owners left stranded in Europe and leisure marine industry faces turmoil due to Government inaction
RYA and British Marine release joint statement on Brexit discussions with HMRC... read more (October 2020)
RYA writes to Government to discuss recreational boating and the future UK – EU relationship
Clarification is sought on possible Brexit developments affecting boaters... read more (July 2020)
Brexit guidance is updated for recreational boaters
Ensure that you're up to date with the latest Brexit advice... read more (May 2020)
RYA reflects on result of 2019 General Election
Government’s commitment to ‘getting Brexit done’ ... read more (December 2019)
EU Commission confirms RYA thinking on Returned Goods Relief
More Brexit lobbying activity … read more (September 2019)
RYA continues to engage with government on Brexit issues
Brexit update … read more (August 2019)
RYA holds talks with Immigration Minister and Home Office officials on border controls
Keeping you posted on Brexit developments … read more (July 2019)
RYA update on status of vessels lying in the EU27 at the time of Brexit in the event of ‘no deal’
HMRC responds to question on its treatment of boats returning to the UK … read more (March 2019)
RYA continues to lobby Government on Brexit issues
Deal or no deal? … read more (January 2019)
Proposed reciprocal visa-free travel for EU and UK nationals in a no deal scenario
RYA considers latest Brexit preparedness update … read more (November 2018)
RYA members encouraged to contact local MPs to highlight recreational boating issues
Will you add your voice to the negotiations? … read more (September 2018)
RYA reflects on Government’s Brexit White Paper
What will the future relationship between the UK and the EU mean for recreational boating? ... read more (July 2018)
Further details on the UK's position on 'end state' relationship with EU post-Brexit expected during the summer
Latest on Brexit and RYA priorities … read more (July 2018)
Brexit: RYA’s main concerns still unresolved
The transition agreement is good news for Britain’s boaters, but unanswered questions about the final deal remain … read more (RYA magazine summer 2018)
MPs welcome the RYA and Basi’s call for seasonal workers
Government recognises contribution made by recreational boating … read more (RYA magazine summer 2018)
Brexit: transition agreement is good news for Britain’s boaters, but unanswered questions about the final deal remain
Latest Brexit news, commentary and RYA priorities … read more (March 2018)
Brexit: boaters voice their concerns
RYA push to protect boaters’ benefits … read more (RYA magazine spring 2018)
Presenting the latest Brexit news, commentary and RYA priorities
2017 ended just as it started… with the news headlines dominated by Brexit … read more (December 2017)
Boating after Brexit
Key issues … read more (RYA magazine autumn 2017)
How will Brexit affect boating?
Lobbying to reduce regulatory interference will be an important role for the RYA … read more (RYA magazine summer 2017)
What may Brexit negotiations mean for EU… and you!
Brexit and boating … read more (June 2017)
Boat Owner Survey launched to support work on Brexit
Data needed to ensure that Government understands and takes account of recreational boating activity … read more (June 2017)
Brexit, what happens next?
With Article 50 finally triggered, some nine months after the historic Brexit vote, we ask what happens now? … read more (March 2017)
What will Brexit mean for boating?
We take a look at what the outcome of the EU referendum is likely to mean for UK boaters travelling in European waters … read more (RYA magazine autumn 2016)
RYA statement on the outcome of the EU Referendum
UK votes to leave EU, however this decision does not take immediate effect … read more (June 2016)
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