With MPs voting to endorse Theresa May's Brexit strategy, after she made a series of concessions, this week's developments in Parliament may suggest that the chances of getting a deal through and the UK leaving the EU, if not on 29 March (given the need to pass outstanding legislation through Parliament before Brexit), then shortly after have increased. However, 29 March 2019 is indeed fast approaching and as a deal has not yet been agreed between the EU27 and the UK, we think it is timely to remind you of the advice that we provided last year on the implications of a no-deal Brexit for boat owners.
Boats which have either been made and supplied in the EU or which have been imported into the EU have ‘Union status’. It is this status which allows such boats to move freely through (and remain indefinitely anywhere in) the customs territory of the EU.
What does no deal mean?
In the event of a ‘no deal’ Brexit, the location of the boat, at the point in time that the UK leaves the EU, will determine its future status. The European Commission has indicated that a boat lying in the customs territory of the remaining 27 EU countries (EU27) will retain Union Status.
Crucially, the Commission’s view is that ‘no-deal’ means that a boat lying in the UK will not have been exported from the EU at the time the UK ceases to be an EU country because it was in free circulation in the EU28. Therefore if the owner wants to take it back to the EU at a later date, it would not be entitled to relief from VAT and import duty – in other words because the boat has not been exported, it cannot be re-imported.
Its status will be that of a third-country boat when arriving in the Customs territory of the Union, that is it will be treated as non-Union goods. Customs controls for such UK boats will be the same as those for boats coming from any other third country - 18 month temporary admission to the EU is normally available, which allows the boat entry to the EU27 without the payment of VAT and import duty, although certain conditions must be met and the intent must be to re-export the boat. A boat which is in the EU under temporary admission may not be placed on the market (i.e. it can’t be sold).
The UK’s current legislation mirrors the EU legislation therefore we assume the reverse will apply in the UK. This could be an issue for UK owners wishing to bring a boat, which was lying in the EU27 at the time of Brexit, back to the UK.
This is the reason that a boat’s location in the event of a ‘no-deal’ is so important; if it is in the EU27 it will retain Union status, if it is in the UK it will lose that status and, we assume, will then be treated as UK goods.
If, in the coming weeks, a withdrawal agreement is made between the UK and the EU, our understanding is that nothing will change on 29 March. A boat lying in the UK will have Union status, for the duration of the transitional period. However, unless alternative arrangements are agreed, this only delays the changes.
As we approach the UK’s scheduled withdrawal date of 29 March, we continue to engage in discussions with government and Parliamentarians on issues of interest and concern to recreational boaters. These include the different customs arrangements set out for Northern Ireland and Great Britain under the ‘backstop’ arrangements included in the Withdrawal Agreement which was published in November.
With many of the Brexit issues impacting the sector due to be discussed in the negotiations scheduled to begin after the UK formally leaves the EU, we are also stepping up our efforts in these areas. This includes the treatment of RYA qualified instructors under the new migration regime for seasonal workers due to be agreed between the UK and EU during the Implementation Period – an area which we have contacted Parliamentarians about as the Immigration and Social Security Co-ordination (EU Withdrawal) Bill continues to make its way through Parliament.
Alongside engagement by the RYA itself, it is more important than ever that RYA members and supporters who wish to do so are contacting their local MP to highlight the importance of safeguarding the future of the recreational boating sector in the Brexit negotiations.
RYA member engagement to date has already produced a positive response from the Government on the Union Goods issue and will help keep recreational boaters’ concerns as high a priority as possible within government during the coming weeks and months. We are also actively seeking clarification from HMRC on the re-admission into the UK of boats lying in the EU at the time of Brexit.
If you have not yet contacted your local MP and would like to do so, you will find a handy template letter, along with an MP briefing paper and guidance on how to approach MPs on the RYA Current Affairs hub at www.rya.org.uk/go/brexit.
For more information about the RYA’s Brexit work or for guidance on how to contact your local MP, contact the Cruising, Legal and Government Affairs team at email@example.com.