Ministers delay changes to VAT on yachts returning from Europe!

Published: 22 July 22

The Association of Yacht Brokers and Agents (ABYA) has been lobbying HMRC for the past eighteen months to make changes to the existing Return Goods Relief (RGR) scheme. The new changes would enable anyone who purchased a vessel, pre 31st December 2020 based in Europe, on which they have evidence that UK/EU VAT has been paid, to return the vessel to the UK under the Return Goods Relief scheme without having to pay VAT again.

The current RGR scheme only allows someone to bring their vessel back without paying VAT if they can provide evidence that they were the person that originally exported the vessel out of the UK.

ABYA were due to attend a presentation by HMRC at the Treasury in relation to the proposed changes to RGR in June 2022 but the meeting was cancelled hours before it was due to take place.

ABYA have continued to lobby HMRC to publish any proposed changes as soon as possible to enable boat owners to plan the return of their vessel in 2022.

After reaching out for an up-date, a spokesperson for HMRC stated via email yesterday "I am sorry we haven’t been able to provide you with an update on the issues you have raised about import VAT on boats purchased in the EU by UK citizens. As we’ve previously indicated this is not straightforward and Ministers are still considering the issue. I appreciate customers and brokers affected will be making decisions about whether to bring their boats to the UK during the current sailing season. Your customers and members should plan any journeys during the current sailing season on the basis that the current rules will apply on arrival in the UK. We will provide you with an update as soon as we are able to do so."

In response, Peter Norris, Chairman of ABYA wrote “The ongoing delay by Ministers in approving the changes is extremely frustrating and disappointing. We are constantly being told that UK businesses need to help grow the economy and here we have a situation where Ministers are effectively delaying UK boat owners returning their vessels to the UK to be sold, berthed, or maintained. These services would generate income for UK business and the UK economy as a whole. There is currently a shortage of used boats in the UK market due to BREXIT and the lack of availability of new boats. The current changes in Parliament mean that this issue is likely not to be reviewed again until the middle of September 2022 which will be too late for owners to make plans to return back to the UK in 2022”.

ABYA will continue to lobby HMRC to apply pressure when new Minsters have been appointed after the 5th September to get the required changes in place as soon as possible.

The ongoing delay by Ministers in approving the changes is extremely frustrating and disappointing. We are constantly being told that UK businesses need to help grow the economy and here we have a situation where Ministers are effectively delaying UK boat owners returning their vessels to the UK to be sold, berthed, or maintained. These services would generate income for UK business and the UK economy as a whole. There is currently a shortage of used boats in the UK market due to BREXIT and the lack of availability of new boats. The current changes in Parliament mean that this issue is likely not to be reviewed again until the middle of September 2022 which will be too late for owners to make plans to return back to the UK in 2022

Peter Norris, Chairman of ABYA

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