The Cruising Association says it is extremely disappointed that HM Revenue and Customs (HMRC) will not make any changes to the VAT rules for boats that were located in the EU on 31 December 2020 and that had never been in UK under current ownership.

Published 2 years ago

Source:  Cruising Association

At a meeting with HM Revenue and Customs (HMRC) on 14 December 2022, attended by RATS (Regulations and Technical Services Group) on behalf of the Cruising Association (CA) and by other boating organisations, it was announced that no changes will be made to the VAT rules for boats located in the EU on 31 December 2020 that had never been in the UK under their current ownership. If such boats enter UK waters while under UK ownership, then UK VAT will be payable.

The CA is extremely disappointed at this outcome.

In March 2019, HMRC stated to RATS that, “UK owned boats will retain their UK VAT paid status whatever their location on the day the UK exits the EU”. In September 2020 HMRC reversed this announcement. The timing of this reversal meant that most owners were out of time to return their boats to the UK due to the lateness in the season for Northern European waters and the effect of Covid-19 restrictions.

For more than three years, RATS on behalf of the CA has been working together with other organisations, including the Royal Yachting Association (RYA) and British Marine (BM), to engage with and lobby HMRC on a positive outcome. RATS provided HMRC with detailed scenarios and background information.

“The Cruising Association has been informed that this HMRC decision marks the end of the road for any hope of a positive outcome,” said Derek Lumb, President of the Cruising Association. “The CA is bewildered as to why people who bought boats in Europe and paid VAT on those boats should now be discriminated against in this way. This intransigence by HMRC is deeply disappointing and a further obstacle for the cruising community.”

RATS will continue their engagement with HMRC and will be requesting transparency as to the grounds on which this decision was made and the logic behind it. It will be difficult to overcome the decision, but RATS will continue to challenge it.

Disclaimer

Any advice has been prepared by the Cruising Association, its members and others, and they have tried to ensure that the contents are accurate. However, the Cruising Association, its employees, contributors and relevant members shall not be liable for any loss, damage or inconvenience of any kind howsoever arising in connection with the use of such advice, save to the extent required by applicable law.

………………………………………………………………………………………………………………………………………

The Regulations and Technical Services group (RATS) is an executive committee of the Cruising Association (CA) made up of CA volunteers. RATS gives advice and assistance to CA members and others on a voluntary basis but this is subject to the following Disclaimer and should not be regarded as a substitute for appropriate professional advice.

Find out more about the Cruising Assocation at www.theca.org.uk.

………………………………………………………………………………………………………………………………………

Related News:

• UK:  Cruising Association Announces Update on VAT Rules for UK Boat Owners (Noonsite January 2022)
  
• UK:  VAT and Customs Clarification for Recreational Boaters Post-Brexit (Noonsite April 2021)
  
• Update on EU and UK Tariffs on US Cruising Yachts (Noonsite July 2021)
  

………………………………………………………………………………………………………………………………………

Related Links:

Cruising Association RATS group