“I deal with tough mathematical questions every day but please don’t ask me to help with Brexit.“— Stephen Hawkins
Future terms for the relationship between the UK and EU are, as yet undecided and if negotiations fail to conclude in their entirety by December 31st, 2020 the UK will leave with No Deal.
A common question asked by those with vessels under the UK flag is whether they should change or if they choose for their yacht to remain under the UK authorities, where should the yacht be on 31st December 2020?
Advice about the consequences for both private and commercial vessels requires a careful evaluation based on individual circumstances and we urge our clients to seek counsel from those with a multijurisdictional approach.
Miller Marine surveyors as delegated by flag administrations are able to offer advice about the pros and cons of different flag authorities to meet the needs of the owner and/or company structure and we indeed provide the processes for changing flag state alongside our agents, partners and leading legal counsel that we can recommend.
Talk to us about your concerns and we will certainly direct you to the right
professional to suit your situation.
VAT is one of the most complex issues for yacht ownership and the anomalies between different member states application of the rules can make it a minefield for those without qualified expertise and often a headache for those that have it!
Those who own yachts via a UK entity or those registered under the UK flag should take immediate advice as to what a No Deal exit potentially means for them. This is an even more pertinent issue if VAT was paid in the UK or the yacht was imported into the UK.
As the UK will no longer be part of the EU VAT system it will be treated accordingly as a third country jurisdiction for VAT and Customs. The questions requiring clarity that we are hearing from concerned owners, managers and industry professionals are:
- VAT paid yachts paid in the UK could lose their VAT paid status?
- Vessels imported into the UK will remain in free circulation or lose this post Brexit or when they leave to non-EU waters?
- Temporary Importation will be possible for yachts owned by UK residents within the EU?
- UK residents will purchase yachts from EU countries without paying VAT?
- Commercial vessels owned by a UK company who wish to charter in the EU may need to be re-imported post Brexit?
In addition, for Commercial yachts post Brexit, UK flagged vessels will likely be treated as a non EU flag by EU territories in respect of Charter Licences and Returned Goods Relief so we do urge our clients to seek advice when they are considering where they intend to charter and use their yacht.
If you wish to discuss any of the issues above then please contact us on +34 672043882 and we will ensure you get the correct advice.