The UK left the EU at 2300 UTC on 31 January 2020. A transitional period followed during which the UK remained in the EU Customs Union and in the Single Market with free movement of people, capital, goods and services – the four freedoms. This ceased to be the case when the transition period ended at 2300 UTC on 31 December 2020. The EU-UK Trade and Cooperation Agreement, which was reached on 24 December 2020, forms the basis for the future relationship between the UK and the EU.
The protocol on Ireland/Northern Ireland came into force at the end of the transition period. It is a mechanism that is intended to avoid a hard border on the island of Ireland, protect the all-island economy and the Good Friday (Belfast) Agreement, and safeguard the integrity of the Single Market. Northern Ireland continues to apply the Union Customs Code and remains aligned to a limited set of EU Single Market rules needed to avoid a hard border. It is often necessary to differentiate between Northern Ireland (NI) and Great Britain (GB) when providing advice.
The RYA has successfully
For boat owners whose boats were in the EU at the end of the Transition Period, the RYA negotiated a period of grace during which the requirement to return within three years of departure from the UK is waived. This period of grace was extended and now runs until 30 June 2022. A further extension is being sought.
The RYA wants to achieve
Although HM Revenue and Customs (HMRC) is responsible for applying VAT legislation, including the collection of VAT, and the setting of VAT rates, clarification is still required on recreational boat movements under the Protocol. HMRC is aware of the RYA’s concerns and has undertaken to provide this information as soon as possible.
The RYA will continue to seek clarity until the situation for boats which were lying in Northern Ireland at the end of the transition period is fully understood and clarification on the procedures for boat movements, with Northern Ireland as the departure point or the destination, has been received.
Boats stranded in the EU
Boat owners that purchased their boat outside the UK and did not bring it to the UK prior to the end of the transition period are not eligible for Returned Goods Relief (RGR) and therefore face paying import VAT and duty if they bring their boat to the UK, even for a day. This is the case even if VAT was paid in the UK. The RYA believes that as the Government gave no warning of its intention to legislate in this way, thereby not informing owners that they needed to bring their boat to the UK prior to 1 January 2021, it must offer a mechanism for boat owners caught out by this legislation to bring their boat to the UK without paying import VAT and duty. The RYA continues to lobby Government in this regard.
Duration of stay and visa issues
Most British Citizens are no longer entitled to free movement in the EU. Visits to the EU and other Schengen Area countries are now restricted in duration and depending on the nature of the trip a visa may be required. This presents issues for recreational boaters wishing to spend extended periods of time living aboard their boat and separately presents challenges for RYA Instructors, Examiners and Inspectors needing to spend time in the EU and other Schengen Area Countries. The RYA has made representations to ensure the needs of recreational boaters and RYA Instructors, Examiners and Inspectors are understood and continues to work towards solutions in these areas.
Crossing the UK Border
The RYA continues to seek clarification from the UK Border Force (UKBF) and HM Revenue and Customs (HMRC) where questions arise relating to crossing the UK border. The RYA continues to demand that an updated, complete and accurate version of Public Notice 8 is provided and is working with the Home Office to develop a digital application to submit pleasure craft movement reports and an electronic version of the C1331 which will be used as an interim measure.
Paperwork documenting the domestic ‘VAT’ status of a boat continues to cause concern and has the potential to disrupt boat sales / purchases in the future. This is a matter that has been of concern to the RYA for many years which until 2021 was an EU issue, and therefore not within HMRC’s gift to resolve. As HMRC is now only concerned with the domestic ‘VAT’ status of a boat rather than its VAT status for the EU as a whole, it is possible for HMRC to provide certainty to boat owners regarding a boat’s status and the RYA is seeking a satisfactory solution which doesn’t involve retaining certain paperwork for a boat’s lifetime.
Since the end of the transition period there has been considerable discussion around whether a carnet is required when towing a boat to the EU as many boat owners will not be eligible for EU RGR and will be relying on Temporary Admission to enter the EU without paying import tax and duty. We continue to seek definitive information from UKBF on the procedure and paperwork for crossing the UK border trailing a boat. We are also awaiting confirmation of the procedure anyone trailing a boat to the UK must follow if the boat does not qualify for UK RGR and import VAT and duty are payable.
On the RYA website we no longer have a page dedicated to the impact of Brexit. We have updated our guidance across the website to reflect the situation as we currently understand it and continue to do so as definitive information becomes available from Government.
For the latest guidance see: