Risk of double VAT for UK boaters based in the EU
British Marine and the Royal Yachting Association (RYA), the reference associations for yachting in the United Kingdom, have recently informed about the progress of their discussions with the British tax authorities ahead of the Brexit. They are concerned about the announced handling of the payment of VAT and import charges on pleasure craft. The HMRC, in charge of taxes and customs duties, indicates that in the current state of the legislation, after the end of the transition period on 31 December 2020, British citizens wishing to repatriate a boat will only be exempt from VAT and customs duties if the boat has left the United Kingdom less than 3 years ago. Otherwise they will have to pay VAT for the second time.
A challenge for the second-hand market in the United Kingdom and in the European Union
RYA and British Marine are alarmed by the consequences for yachtsmen, but also for the entire used boat industry: "This is now a serious situation that is going to create turmoil in the used boat market. For British brokers and dealers in the yachting industry, there are still doubts and confusion about their situation. There is a strong likelihood that boats that have currently paid VAT (which will no longer have the status of VAT paid in the EU-27 after Brexit) will be devalued and become less attractive to buyers, which will impact business and ultimately jobs in the industry," says Lesley Robinson, head of British Marine.
As a result, the second-hand boat market in the European Union, particularly in France, could be impacted. British yachtsmen will probably be tempted to sell their boats in France to avoid paying the tax a second time. This could increase supply.
