VAT and Northern Ireland Based Boats After Brexit

When people talk about a boat’s “VAT status”, they’re usually referring to something slightly different: its customs status. That distinction matters, because a boat’s customs status can change over time.

Since Brexit, this has become more complicated, particularly for boats based in Northern Ireland. This article sets out what we currently understand, why things aren’t always clear-cut, and what boat owners should be aware of.

VAT Status and Customs Status: What’s the Difference?

In both the UK and the EU, relief from import VAT and duty is normally linked to whether VAT has already been accounted for. That’s why you’ll often hear a boat described as being “VAT paid”.

In practice, VAT evidence is used as a way of showing a boat’s customs status, rather than being a status in its own right. It’s a shorthand that has stuck, even though it doesn’t tell the full story.

A Quick Guide to Customs Terminology

Whenever a boat crosses into a different customs territory, it is classed as an import. At that point, VAT and duty may become payable unless the boat qualifies for a relief.

One of the most common reliefs is Temporary Admission. If a boat is visiting another customs territory for a limited time, and certain conditions are met, it may be imported temporarily. Provided the boat leaves again within the permitted period, VAT and duty are not payable.

If a boat is imported on a longer-term basis or the owner doesn’t meet the conditions for Temporary Admission, import VAT and duty may be due.

There are other reliefs too. For example, if a boat previously left a customs territory on a temporary basis and later returns, it may qualify for Returned Goods Relief, meaning VAT and duty would not be payable.

If none of these reliefs apply, VAT and duty are payable when the boat enters the customs territory.

How Boats Moved Around the EU

When the EU single market was established in 1993, goods could move freely between member states as long as they were “in free circulation”. For boats, that meant any relevant taxes and duties had already been paid or accounted for.

Before 1993, a boat could be bought in the UK and taken to another EU country, such as France, on a temporary basis without VAT being due. When the single market came into force, boats already in EU countries under temporary arrangements were required either to pay VAT and enter free circulation, or to leave the EU.

For a time, spot checks were common and boat owners were asked to show evidence that VAT had been paid. Over the years, these checks became less frequent and it was often assumed that a boat flying the flag of an EU member state was in free circulation. Even so, the advice to keep VAT evidence remained.

In 2016, the Union Customs Code replaced earlier rules. Some terminology changed, for example, Temporary Import became Temporary Admission, but the core principles stayed the same.

What Changed After Brexit?

Everything changed for the UK on 31 December 2020, when it stopped being treated as an EU Member State. Boats located in Great Britain at that point lost EU Union status.

Northern Ireland’s position is more complicated. Northern Ireland is not in the EU, but under the Windsor Framework it remains aligned with EU single market rules for goods. At the same time, it remains part of the UK customs territory.

Despite extensive engagement with HMRC and the European Commission, there is still no complete clarity on how the customs status of boats in Northern Ireland should be determined in every scenario.

Part of the difficulty is that boats don’t behave like most goods. Customs legislation wasn’t written with their movement in mind, even though it still applies to them.

The Challenge of Missing Paperwork

One of the biggest issues when trying to establish a boat’s customs status is missing or incomplete paperwork.

A boat’s customs status can change every time it crosses a customs border. Evidence that VAT was paid when the boat was new only confirms its status while it remains in the same customs territory.

Under the Union Customs Code, goods lose Union status when they leave the EU. If they later return, relief from VAT and duty may apply, but only if certain conditions are met. In practice, boats often cross borders without any formal interaction with customs, and no documentation is issued at the time.

That missing paperwork is exactly what may later be requested to prove a boat’s customs status.

In many cases, a boat’s history can provide a reasonable level of confidence that VAT and duty haven’t been avoided. However, if a boat owner is challenged to prove Union status, it can be extremely difficult — particularly for older boats or those with multiple previous owners.

All too often, customs status is assumed based on ownership or the flag the boat flies, rather than documented evidence.

What to Do If You’re Challenged

While the RYA provides guidance based on the best information available, decisions made by an EU Member State’s customs authority must be challenged through that country’s own procedures. This could involve a complaints process or, in some cases, the courts.

Although complaints can be made to the European Commission, they will usually only intervene if there is evidence that a member state is consistently applying EU law incorrectly.

Ongoing Work by the RYA

The RYA, working through the European Boating Association, continues to press for clearer guidance and more consistent application of the rules across EU Member States.

We have obtained as much clarity as possible from HMRC and will continue to seek answers to new questions around the movement of boats between Northern Ireland and Great Britain, and between Northern Ireland and the EU, including the Republic of Ireland.

Practical Tips for Boat Owners

• If you are selling a boat in Northern Ireland to a buyer from Great Britain or an EU Member State, it is the buyer’s responsibility to make the required import declarations.

• If you are buying a boat outside Northern Ireland and bringing it home, follow the guidance published on gov.uk.

• Keep any paperwork that shows where your boat has been, such as marina receipts as this may be useful if questions arise in the future.

This article reflects the RYA’s understanding as of 30 April 2025.