Displaying items by tag: Returned Goods Relief
RYA Shares Dismay as Returned Goods Relief Policy Changes Refused by UK Government
The Royal Yachting Association (RYA) has expressed its disappointment as the British Government’s rejection of its proposal to allow recreational boat owners, established in the UK and who lawfully purchased and kept their boat in the EU at the time the UK was an EU member, to be eligible for Returned Goods Relief (RGR).
The RYA, British Marine, Association of Brokers and Yacht Agents, and the Cruising Association were informed of the decision at a meeting with HMRC last Wednesday (14 December).
On 25 April 2019, the Government originally said: “The intended UK policy is that a UK vessel will not lose its status as VAT paid in the UK because it is outside UK territorial waters on EU Exit Day. When the vessel returns to the UK the person responsible for the vessel can claim Returned Goods Relief.”
On 03 November 2020, the Government reaffirmed: “If a vessel was re-imported during 2021, it would be sufficient to show that any sale or transfer or ownership had been made in compliance with [EU] VAT legislation.”
Despite two separate confirmations by the government in April 2019 and November 2020, the RYA says, it was not until 17 December 2020 that HMRC stated the prior advice was incorrect and that it would be unable to apply an easement for returning vessels after Brexit.
This gave boat owners just 14 days to re-base their boats to the UK to avoid a second VAT charge. Given the distance, winter weather conditions and above all COVID travel restrictions, this was not only unrealistic but for most it was simply impossible, the RYA says.
Mel Hide, RYA director of external affairs, said: “This proposal has been with the Government since January 2022 following the successful case we made for an easement of the three-year RGR condition. It is therefore a deeply disappointing outcome and falls well short of resolving the issue for those who have been caught out by incorrect advice provided by the Government.
“It would also seem to fall short of the Government commitment to assist UK industry as we forge our future outside of the EU. We must now consider what action we can collectively take to seek a better outcome.”
Lesley Robinson, CEO of British Marine, commented: “This is obviously very disappointing news in light of the previous commitments from Government to support UK boat owners bringing their vessels back to the UK. We will continue to work with our strategic partners to challenge this decision and press for a change in policy.”
Confirmation of Returned Goods Relief Waiver ‘Outstanding News for UK Recreational Boat Owners’ Says RYA
Following reports earlier this month of the UK Government’s intention to waive the three-year condition for Returned Goods Relief, it’s now been confirmed that from 1 January 2022 new legislation will give certainty to UK-based recreational boat owners post-Brexit.
Boat owners returning their vessels to the UK can claim relief from import VAT under Returned Goods Relief (RGR) 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 are in response to concerns set out by the Royal Yachting Association (RYA) over the past two years, ensuring that legislation and UK Government guidance is aligned with previous practical application of RGR rules 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; and
- that a boat is treated as ‘personal effects’ for the purposes of this waiver.
Katherine Green and Sophie Dean, HMRC Directors General, Borders and Trade, commented: “We are 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.”
Mel Hide, RYA’s director of external affairs, said the confirmation “is outstanding news for UK recreational boater owners and we welcome it as a pragmatic outcome in response to the considerable amount of time and effort that the RYA has put in to secure this result”.
Guidance on Returned Goods Relief will be updated from January once the legislation has been introduced, the RYA adds.
UK Set to Waive Three-Year Condition on Returned Goods Relief for Recreational Boat Owners
In a reprieve for many UK-based private boat owners, the British Government intends to waive the three-year condition on Returned Goods Relief, as Yachting Monthly reports.
Pending changes to legislation will mean that vessels that have been based in the UK at some point in their current ownership will not be recharged VAT on return to British waters from the European Union.
While welcoming the news, the Royal Yachting Association added: “We are fully aware that there are those who own boats legitimately bought and kept in the EU when the UK was a member state which have never been in the UK.
“We continue to press the government to recognise that export for these boats took place at the end of the Transition Period … As such, the government should accept that the export/import condition for Returned Goods Relief is deemed to have been met.”
Yachting Monthly has more on the story HERE.
The Royal Yachting Association (RYA) and British Marine have welcomed HM Revenue and Customs (HMRC) announcement of a six-month extension to the one-year grace period for Returned Goods Relief (RGR) previously put in place by the British Government.
The news yesterday (Thursday 25 March) extends the grace period for RGR until 30 June 2022 for all goods including recreational craft, regardless of when they left the UK, and follows representations from the RYA and British Marine asking for a three-year transition period.
Both organisations have argued that the one-year grace period effective from the end of the Brexit transition period, in respect of the three-year condition for RGR, was not sufficient — highlighting such issues as pandemic travel restrictions, Schengen Area immigration rules, insurance and the length of the sailing season.
This issue was central to a letter that the RYA and British Marine sent to the chief executive of HMRC in February, calling for a holistic approach to addressing the post-Brexit issues impacting on recreational boat owners and the British leisure marine industry.
Howard Pridding, the RYA’s director of external affairs, said: “The HMRC announcement is timely, as we have seen additional concerns from members about the new restrictions on leaving the UK announced this week.
"We will continue our constructive dialogue with HMRC on all outstanding post-Brexit issues, including the repatriation of boats that have not been in the UK under their current ownership, and look forward to receiving a full response from the HMRC chief executive on the points that we have raised.”
Lesley Robinson, CEO of British Marine, added: “This collaborative work with the RYA shows that together we can better influence matters affecting the leisure marine sector and boaters.
“Whilst we requested and set out a strong case for a three-year RGR transition period, the six-month extension is welcomed.
“However, given the current restrictions on international travel, we hope HMRC will demonstrate flexibility to the extension to allow all UK boat owners to return their boats in a safe weather window. This flexibility would also be welcomed by UK boat retailers and brokers in order to keep fulfilling the rising demand for second-hand boats in the UK.”
