Post-Brexit

Our work relating to issues that have arisen as a result of Brexit.
 

Current situation

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

Returned Goods Relief (RGR)

Customs clearance is now required for all pleasure craft arriving in the UK (unless arriving from the Isle of Man). Import VAT and duty are payable unless a relief is applicable. RYA Members can find further information about reliefs in the RYA VAT Guide for Boats

One such relief is Returned Goods Relief (RGR). Boat owners returning their vessels to the UK can claim relief from import VAT and duty under RGR if they meet the conditions for the relief. 

A period of grace was agreed for 2021 during which one of these conditions, the requirement to return to the UK within three-years, was waived for all goods on a temporary basis. Initially the RYA negotiated an extension to the period of grace, but continued lobbying has now resulted in pleasure craft being specifically included as personal property in an enduring waiver to the requirement to return within three years. 

The waiver applies to the personal property of a UK resident which is being returned to the UK for the personal (non-commercial) use of a UK-resident person to meet household needs of a UK-resident person. The vessel must still have been UK domestic goods (or equivalent) when it was exported, be imported by the person who exported and have undergone no more than running repairs outside the UK that did not increase its value. 

The RYA wants to achieve

Northern Ireland

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. Some information has been provided and HMRC has undertaken to provide the outstanding 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 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 press for an updated, complete and accurate version of Public Notice 8 and is working with the Home Office to develop a digital application to submit pleasure craft movement reports. An electronic version of the C1331, which will be used as an interim measure, has been made available.

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.  

Recreational Craft Regulations / Recreational Craft Directive

Any vessel being traded second-hand between the UK and EU may be required to meet the obligations set out in either the Recreational Craft Regulations (RCR) in the UK or the Recreational Craft Directive (RCD) in the EU when placed on the market in the other jurisdiction. A period of grace meant that this was not enforced in 2021, but it will apply to boats place on the marking in the EU from 1 January 2022 and in the UK from 1 January 2023.

In certain circumstances a costly Post Construction Assessment (PCA) and third-party verification will be needed. The RYA provided clarification earlier in the year and continues to engage with its partner organisations and the Department for Business, Energy and Industrial Strategy (BEIS) to fully understand the implications of this complex and potentially difficult situation and make representations on behalf of recreational boaters. 

RYA members can find more information in the RYA RCR and RCD Guide for Boats

Latest update

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: