RYA seeks more guidance from HM Treasury on Returned Goods Relief

In light of the difficulties in taking advantage of transitional arrangements due to Covid-19, HM Treasury has now shared its updated plans with the Royal Yachting Association (RYA) and British Marine for an extension period of one year on its Returned Goods Relief (RGR) policy.

According to the RYA, the payment of VAT on a boat is not necessarily a one-off event. In fact, every time your boat leaves the customs territory of the EU, technically speaking, you risk having to pay VAT on its return. This is because, the EU VAT Directive states that a chargeable event for VAT occurs when goods (in our case a boat) are imported.

Thus, RGR provides relief from charges on re-imported goods, which were originally in free circulation in the European Union (EU), returning in the same state as at original export.

The new announcement from the treasury follows both organisations’ repeated calls to HM Revenue and Customs (HMRC) for a review of the transitional arrangements for post-Brexit customs and VAT issues.

Following a virtual meeting between the RYA, British Marine and HMRC on 14 September in which HMRC updated the group on the government’s approach to RGR after the transition period, the RYA wrote to the financial secretary of the treasury to raise concerns about the ineligibility for RGR to be applied to recreational craft that have been based in the European Union (EU) for more than three years. The minister has now responded to confirm that the government will extend RGR for a period of a further one year to goods that left the UK/EU more than three years before the end of the transitional period and are currently in the EU provided the other conditions of RGR are fulfilled.

“We are pleased that the treasury has listened to our concerns however, a one-year extension remains wholly short of the three-year transitional arrangement that is needed, and fulfilling the other conditions of RGR is causing further uncertainty,” says RYA’s director of external affairs, Howard Pridding.

“Recreational boating is a seasonal market and moving boats is affected by weather conditions and other safety related issues. The Covid-19 situation additionally complicates this and boat owners are going to need a realistic transitional period to establish a date of export to qualify for RGR.

“We will continue our dialogue with HMRC pressing them to understand that eligible recreational craft should secure relief from VAT and import duty on arrival in the customs territory of the UK if it meets the criteria for RGR and has returned to the UK by 23:00 UTC on 31 December 2023. We also need answers to questions of detail that we have been repeatedly asking government before we can feel confident in the advice that we are providing to RYA members.”

“Whilst I appreciate the HM Treasury turning their attention to this issue, there are still fundamental questions and matters that need answering,” says Lesley Robinson, CEO of British Marine. “For example, establishing a ‘date of export’ for a boat to qualify for RGR needs clarifying. It is clear that the impact of Covid-19 and travel restrictions means that the one-year extension still falls a long way short of what is required for boaters and marine businesses to make all the necessary arrangements for movement of vessels and future planning. We will persist in our efforts on behalf of British Marine members.”