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VAT changes to affect recreational boat owners from 01 January 2022

by Emma Cotton 20 Dec 2021 15:08 UTC
VAT changes to affect recreational boat owners © RYA

Confirmation of a Returned Goods Relief waiver is "outstanding news for UK recreational boat owners," says RYA.

The Royal Yachting Association (RYA) reported the Government's intention to waive the three-year condition for Returned Goods Relief (RGR) on the 09 December.

Following the RYA's recent meeting with HM Treasury and HMRC, the Government has now confirmed that from 01 January 2022, legislation will be 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.

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, 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 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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