VAT – tide by tide

January – Brexit blues

After years of trying to work out what Brexit means for yachts, there are still some annoying issues yet to be cleared up, a month into the new regime.

The most vexed question is still VAT. Most of us do have an answer, though not the one we wanted: our boats lost their EU VAT status if they were not moored in a continental port when the transition period ended. That means that in future they can only be temporarily taken to EU countries.

But a minority is still in a potentially expensive limbo. These are the owners who have been away from the UK for more than three years, who may have to pay VAT for a second time if they return with a boat they bought and paid VAT on here.

Bang goes our EU status

It has now been confirmed that we will lose our boat’s VAT-paid status in Europe on Brexit day, leaving us with only the possibility of a temporary importation licence for up to 18 months.

Only British boats actually kept in the EU on that day will be treated as if the VAT paid on them in the UK is still European VAT. If they are in the UK on Brexit day, then they lose that ‘union goods’ status and can only apply for temporary importation.

Spring Fever in Cowes, awaiting a new engine

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Brexit and our boat

We’ve been looking into the impact of Brexit on our sailing, on the assumption that at some point we will be treated as a third country, just like US and Canadian sailors who cross the Atlantic to visit the EU. If there is a hard Brexit at the end of March, this could all be upon us next season. The result is likely to be a long term increase in paperwork and bureaucracy and a permanent annoyance for British yacht owners.

Even as EU members we have not been bureaucracy free. Because the UK is outside the Schengen zone, we have been obliged in theory to show our passports on arrival, though some Schengen countries such as France often do not bother to enforce passport checks on yachts. (That might be changing, because in July, for the first time in many years, we were boarded on a mooring by French customs officers in a RIB, whose only interest was in our passports).

View from our mooring at Îles Chausey, where we were boarded by French customs.

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