VAT change for recreational boaters

Following the RYA’s meeting with HM Treasury and HMRC, the Government has confirmed that from 1 January 2022, legislation was brought in to give certainty to recreational 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.

Confirmation of a Returned Goods Relief waiver is “outstanding news for UK recreational boat owners,” according to the RYA.

Boat owners returning their vessels to the UK can claim relief from import VAT under 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 that the Government are introducing are in response to concerns set out by the RYA over the past two-years, ensuring that legislation and GOV.UK 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;

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, said: “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 director of external affairs, said: “Confirmation of the waiver that the Government is introducing to RGR 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 RGR will be updated from January once the legislation has been introduced.

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