Do you keep your boat abroad?
HMRC has angered thousands of British yacht and motorboat owners who keep their boats in EU countries by seeking VAT a second time on the value of their boats when brought back into UK waters.
This threat is based on a long-established EU VAT rule being brought into UK law. 'Union-Goods' status applies to boats on which VAT had been paid in an EU country and allows it freedom of movement throughout the EU (including the UK while still a member) without need for further VAT liability or customs duty.
However, 'Union-goods' status is lost if a boat is exported outside the EU for more than three years (under 'Returned Goods Relief' rules) such that VAT must be paid on the existing boat value when re-imported into EU waters.
HMRC was very clear last year that all British owned yachts would continue to hold full VAT-paid status at the end of the Transition Period, irrespective of the location of the yacht.
However, HMRC has now said that it will bring the Returned Goods Relief rules into UK law and apply them rigidly such that exemption from further VAT would only be available for boats returning to the UK within three years of the date from which they left the UK.
This changed stance only became public in early October, despite attempts by many organisations (including the CA, RYA and British Marine) to engage with HMRC on the issue over several years.
Full article on the Cruising Association website: www.theca.org.u
