to pay VAT again on your return to the UK. However, if the yacht has never been to the UK and paid or accounted for VAT whilst outside the UK, RGR will not be available, even if it comes back to the UK before the end of 2021. In those circumstances you will have to avoid the UK and stay in the EU where your VAT status will be preserved. If you paid VAT in the UK and sell the yacht in the UK, you will lose EU VAT paid status. One final issue, will EU flagged, and taxed yachts be able to start or end charters in the UK? The answer is yes, but they will have to be VAT registered in the UK and pay VAT to the UK authorities for the part of the charter that happens in the UK. As an aside, UK based retail and charter brokers will have to account for their commissions to HMRC.
pause the maximum 90 days out of a rolling 180 days, they are allowed to remain in the EU. As to employment law? The general rule is that the law most closely connected with the delivery of the employment will apply. It is likely that if the yacht is permanently moored in the EU, France for example, then French employment law is likely to apply.
EU within 3 years and secondly, she must be substantially in the same condition she was in when she left the EU. A major refit might blow a hole in that with a potential VAT charge on reimportation into the EU calculated on the value of the refit work. Ordinary maintenance may well be exempt but speak to your tax advisor before coming to the UK for a refit. For non-UK yachts which are benefitting from TIR in the EU, the problems of RGR will not apply to them and in those circumstances VAT free refits in the UK begins to look quite attractive. Perhaps it was too much to expect to have all the post-Brexit issues definitively resolved, but at least we have the measure of them and can move ahead.
Tax?
Now this is where it gets interesting. For the first time superyachts which are owned by UK nationals or residents, provided they are not resident or established in the EU, can claim Temporary Importation Relief (TIR) for 18 months. As always, these 18 months can be renewed endlessly by leaving the EU and restarting the TIR clock. This would allow a UK national or resident to take delivery of a new build, or a secondhand yacht, offshore and sail into the EU Customs area without paying import VAT, however this does limit how one can use the yacht in the EU and who they can have on board when the beneficial owner is not present. However, if the yacht sails into the UK, HMRC will demand UK import VAT. Additionally, those who had a VAT accounted for or VAT paid yacht where the yacht has previously been to the UK, HMRC say that if you are looking to return to the UK and claim Return Goods Relief (RGR) you must do so before 31st December 2021 or you will have
The UK as a refit hub
The biggest potential side effect of Brexit is the UK becoming a destination for refits for non- UK flagged yachts owned by non-UK nationals or residents. This is provided that the size of the refit justifies the fuel spend just to get to the UK. Now any qualifying superyacht can mitigate its tax exposure by applying for Inward Processing Relief from the VAT on any refit expenditure. However, the slight kink in the tail is the potential impact on the RGR for an EU tax paid yacht returning to the EU post any refit. In order to preserve any EU VAT paid status, firstly, a superyacht must return to the
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