Skip to main content

New customs and VAT changes affecting boat owners from 1 January

Published on: 17 December 2021

New customs and VAT changes affecting boat owners from 1 January

New customs and VAT changes affecting boat owners from 1 January

New customs and VAT changes affecting boat owners from 1 January

Boat owners are being urged to prepare for new customs reporting changes that will come into force in the New Year.

HMRC can also confirm that from 1 January 2022boat owners will not be required to pay a second amount of UK VAT if their vessels have been outside the UK for more than three years.

Customs reporting requirements

From 1 January, pleasure craft sailing between Great Britain/Northern Ireland and the EU will be required to submit ‘clearance outwards’ reports and ‘reports inwards’ for their journeys.

These new customs arrival and departure requirements, previously only required for journeys to non-EU countries, will apply to all private use non-commercial vessels.

 

Returned Goods Relief

Also from 1 January 2022, legislation will be brought in to give certainty to boat owners that they will not be required to pay a second amount of UK VAT because their vessels have been outside the UK for more than three years. Boat owners returning their vessels to the UK can claim relief from import VAT under the Returned Goods Relief if they meet all the conditions for the relief. One of these conditions is that the goods or effects must normally be re-imported into the UK within three years of the original date of export.

 

The changes the Government are introducing will ensure that legislation and GOV.UK guidance is aligned with previous practical application of Returned Goods Relief rules by HMRC by making it clear:

  • that the normal three-year time limit will be waived for personal effects which are being returned to the UK for the personal use of a UK resident person, without needing to prove that the effects could not be returned within the normal time limit due to exceptional circumstances
  • that a boat is treated as ‘personal effects’ for the purposes of this waiver.

Other changes coming into force in the new year include requirements for boat owners to fly the yellow ‘Q’ flag when arriving into the UK from the EU.

 

Katherine Green and Sophie Dean, HMRC Directors General, Borders and Trade, said:

“We would urge boat owners to make themselves fully aware of the new reporting requirements so they are ready for the 1 January.

“We are also pleased to be able to provide assurance to the sector that there will be no requirement to pay a second amount of UK VAT if vessels have been outside the UK for more than three years.”

 

For full details of the reporting requirements and other changes affecting pleasure craft visit GOV.UK.

 

Details on RGR will be updated from January once the legislation has been introduced https://www.gov.uk/guidance/pay-less-import-duty-and-vat-when-re-importing-goods-to-the-uk-and-eu