Pleasure boating in its various forms is a popular pastime in the UK and EU. Let’s face it, what could be more pleasurable than cruising around the Mediterranean in your own boat?
Many owners have moored their boats in the EU and, provided that VAT has been paid somewhere in the EU (and the owner can evidence that), they can cruise within EU waters with impunity.
However, when the transition period ends on 31 December 2020, the UK becomes a third country and will be subject to the rules applied to such countries.
For boats returning to the UK from the EU, HMRC confirmed on Friday that the date for returning boats had been extended to 31 December 2021. After this date, the boats will be treated as imports and VAT would be due. Subsequent movements from the UK to the EU could be treated under the returned goods relief rules if the correct export documentation is held and the same owner brings the boat back to the UK.
But what about leaving the boat in the EU? Having looked at the EU Commission guidance on pleasure craft, there is nothing there for individuals owning boats moored in the EU. Vendors can treat the movement of a boat from the UK to the EU as an intra-community supply after 1 January 2021 until it reaches the end consumer under the terms of the Withdrawal Agreement. However, boats already in the EU have been supplied at that point.
For third countries, a non-EU flagged boat can be temporarily imported into the EU for 18 months. The boat has to come in under the temporary admission (TA) procedure to qualify. However, the problem for boats already in the EU is that they will not have come in under the temporary admission procedure at the time they came to the EU. In principal, UK goods located in the EU on 1 January (e.g. call off stock) may be subject to VAT and duty as imports. Therefore, at 1 January 2021, the boats located in the EU may be seen to be imports with duty and VAT due. Owners should perhaps be looking at entering their boats under the TA rules at this point.
Pleasure boating in its various forms is a popular pastime in the UK and EU. Let’s face it, what could be more pleasurable than cruising around the Mediterranean in your own boat?
Many owners have moored their boats in the EU and, provided that VAT has been paid somewhere in the EU (and the owner can evidence that), they can cruise within EU waters with impunity.
However, when the transition period ends on 31 December 2020, the UK becomes a third country and will be subject to the rules applied to such countries.
For boats returning to the UK from the EU, HMRC confirmed on Friday that the date for returning boats had been extended to 31 December 2021. After this date, the boats will be treated as imports and VAT would be due. Subsequent movements from the UK to the EU could be treated under the returned goods relief rules if the correct export documentation is held and the same owner brings the boat back to the UK.
But what about leaving the boat in the EU? Having looked at the EU Commission guidance on pleasure craft, there is nothing there for individuals owning boats moored in the EU. Vendors can treat the movement of a boat from the UK to the EU as an intra-community supply after 1 January 2021 until it reaches the end consumer under the terms of the Withdrawal Agreement. However, boats already in the EU have been supplied at that point.
For third countries, a non-EU flagged boat can be temporarily imported into the EU for 18 months. The boat has to come in under the temporary admission (TA) procedure to qualify. However, the problem for boats already in the EU is that they will not have come in under the temporary admission procedure at the time they came to the EU. In principal, UK goods located in the EU on 1 January (e.g. call off stock) may be subject to VAT and duty as imports. Therefore, at 1 January 2021, the boats located in the EU may be seen to be imports with duty and VAT due. Owners should perhaps be looking at entering their boats under the TA rules at this point.
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