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Behind the scenes... Brexit latest

RYA seeks definitive answers to the many questions that are of concern to our 112,000 members, our clubs, and training centres.

EU leaders and the UK agreed at yesterday’s European Council meeting to a further extension to the Article 50 period to 31 October 2019. The UK will be able to leave earlier than this date, if the Withdrawal Agreement published last November is ratified, but there is now a very real prospect of the UK remaining in the EU for at least another six months and taking part in European Parliament elections on 23 May.

One reason for this is that the Government’s talks with Labour – aimed at securing a cross-party Brexit deal – have made little progress over the past week. Given the opposition which a compromise deal would generate in both the Conservative and Labour parties, such a deal looks unlikely at present.

Whilst the outlook for both a cross-party deal and the Government’s own Brexit deal is bleak at the moment, that doesn’t mean the UK is now set to leave the EU without a Withdrawal Agreement in place. Though the new legal default is for the UK to leave, with or without a deal, on 31 October, the strong opposition in the Commons to no deal and the option of requesting a further Article 50 extension both represent significant barriers to this outcome.

However, even the small prospect of a ‘no deal’ departure, whether in October or at another time, is causing businesses and other organisations to continue to prepare accordingly.

As you will know from previous updates, RYA is no different in this regard, and we have been working tirelessly with government since the referendum to find out more about how exactly a no deal departure would affect our members.

A key concern which many club members have raised with us is the issue of the treatment of boats returning to the UK from EU27 waters in the event of a no deal Brexit. RYA has been in constant dialogue with HMRC in order to obtain answers to the many questions surrounding this and the issue of Union Goods status for recreational craft in the event of no deal.

Previously, the EU Commission has indicated that, in the event of a no deal Brexit, boats lying in the EU27 at the time of Brexit would retain Union status and boats lying in the UK at the time of a no deal Brexit would lose Union status and have the status of UK goods.

The Commission has also indicated that, in this case, there would have been no export and therefore a boat lying in the UK at the time of a no deal Brexit would not be entitled to relief from VAT and import duty at the time of reimport to the EU and therefore VAT and, if applicable, import duty would be payable unless the boat qualifies for temporary admission. As UK legislation is based on the Union Customs Code and the EU VAT Directive, we have expressed our concern about the future status of boats lying in the EU27 if we have a no deal Brexit.

In response to RYA, HMRC has said that it has made plans to replicate Returned Goods Relief (RGR) into domestic law in the event of a no deal Brexit. RGR allows those resident in the UK to return with their belongings (including pleasure boats) to the UK without paying customs duty or VAT as long as the items have not been changed since their departure and follow the guidance given in Notice 236: Returned Goods Relief.

The UK Government has undertaken that RGR will be available in respect of UK pleasure craft not moored in the UK on EU exit day. They may return to the UK after exit and be subject to Returned Goods Relief as long as the person responsible has evidence that the VAT was paid on the purchase of the boat in either the UK or the EU. The types of proof needed are shown in Notice 8. VAT accounted for in the UK would need to be shown in respect of vessels purchased after the date of EU exit.

HMRC has committed to meeting with the RYA to work through the many questions that we have, in order to provide definitive and validated advice to our members. We will provide further updates on this and the other Brexit-related issues we have been working on with government as soon as possible.

In addition, RYA’s Brexit Q&A considers a number of boating-related scenarios in the event of a no deal Brexit, based on the RYA’s knowledge of the legislation as it currently stands. For more information about the RYA’s Brexit work, or for guidance on how members of your club can contact their local MP to have their say, visit www.rya.org.uk/go/brexit or contact the RYA Cruising, Legal and Government Affairs Team at brexit@rya.org.uk.

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