Latest News

Delay in Double Brexit VAT Bill for Yachts Based in the Med

Members with boats in the Med, and all EU nations have been thrown a temporary lifeline after UK Government has delayed plans to charge a double tax bill on yachts returning to the UK after Brexit.

Complex new customs rules would have meant that members with boats moored in the EU for longer than three years would have to return to the UK before January 1st 2021, or be forced to pay VAT twice.

The Financial Times reports on the front page today that HM Revenue has has announced boat owners have been granted until December 31st 2021 to return to the UK to avoid the double tax bill, due to the complications of the current Covid pandemic.

Until Brexit, boats could travel freely within the EU without paying customs duties if the VAT had already been paid anywhere within the EU. This will end Jan 1st 2021.

The RYA has campaigned for a three year extension, and have warned UK boat owners that staying in EU waters after the deadline December 31st 2020 could cause EU tax liabilities because 'VAT Paid' only applies to EU flagged craft.  EU authorities can then seek to charge VAT and duty on the value of any UK flagged yacht.

The Financial Times quotes Ruth Corkin, VAT director at accountants  Hillier Hopkins, advising "There may be a double whammy at the EU end if UK owned yachts stay in the EU waters. With Covid each of the member states is going to want to fill in its tax gaps and will be hunting for areas that are a quick win."