As Brexit regulations take shape, much could change about keeping a boat in Europe. Lu and Rod Heikell look at consequences for sailors looking to go cruising after Brexit
If you keep your boat in Europe, you may well have a lot of questions about what that will mean for your cruising after Brexit, both in Europe and returning to the UK.
The Brexit transition period ended on 31 December 2020, and there is still some confusion for many cruisers whose yachts are based in EU countries.
Here we will try to sort fact from myth and provide some guidance on what you need to do to stay within the rules.
The act of leaving the EU means that UK citizens have lost the automatic right to free movement, to live and work wherever we choose in the EU, that we have enjoyed for many years.
It also has tax implications for our boats; as part of the EU we enjoyed the customs union where no tax barriers existed.
For most UK tourists the new limits do not affect their ability to take regular EU holidays.
But for those who are accustomed to spending several months out on their boats in the Med, or those who have cast off for a longer term cruise, it needs careful consideration.
The first thing to realise is that the boat and the person are regarded entirely separately. People are covered by immigration rules. The boat is governed by customs rules.
To make sure we always provide the latest information, this page was last updated on 8 July 2021
Immigration after Brexit
EU countries are both individually and collectively responsible for the immigration status of all non-EU citizens.
EU-wide travel is governed by the Schengen Agreement, which allows 90 days of travel in every 180-day period.
UK visitors do not require a visa, but must still comply with this rule, which runs on a rolling basis, so for each day you spend in the Schengen area you must count back 180 days and ensure that you have not been there longer than 90 days.
Over-staying is a serious matter and is likely to incur severe fines.
You can use a ‘Schengen calculator’ to help keep track if need be.
Individual countries also have their own jurisdiction regarding immigration, such that they are free to grant their own long stay visas, or to issue residency cards, which operate beyond the Schengen rules.
In this way visitors can spend longer in any particular country if they have the correct paperwork.
Thus, time spent in that country may not count against the 90-day Schengen rule.
The harsh fact is, as ‘third country’ citizens, it is much harder to obtain residency in an EU country than it is as an EU citizen.
The Cruising Association has recently launched a campaign, backed by Sir Robin Knox-Johnston, calling for 180-day cruising visas, separate from the Schengen 90-day visa, for sailors visiting the Netherlands, Greece, Spain and Portugal.
It is also examining if the application process for long-term tourist visas in France and Sweden could be simplified for UK cruisers wishing to stay longer.
Customs after Brexit
The main rules for boats are limited to the ‘tax status’ of the vessel.
Any non-EU vessel may be temporarily imported (TI) by a non-EU national for a period of up to 18 months before becoming liable to pay VAT.
Most countries will issue a ‘transit log’ to be kept with the vessel while it is in that country.
If you are going to be cruising after Brexit, then this must be stamped on leaving the country, and a new one obtained at the new country’s port of entry.
At the end of the period the vessel must leave the EU or pay VAT.
The valuation and tax rate for VAT varies by country.
Leaving the EU will automatically restart your VAT clock. The period which you must leave for can be as short as one night.
Most states accept a marina receipt in a non-EU country as proof of leaving.
On re-entry to the EU a new 18-month period of temporary importation starts on a new transit log.
The 18-month ‘clock’
The 18-month ‘clock’ can be stopped by putting your boat out of commission and lodging your papers with the customs office.
The complicating factor on leaving the EU is that many UK-flagged boats are deemed to be VAT paid, where VAT has been paid anywhere in the EU whilst the UK was a member.
It mattered not where in the EU the vessel was purchased or where tax was paid.
The latest from UK HMRC states that a UK-flagged boat which left the UK must return before 30 June 2022 if the owner wishes to claim Returned Goods Relief (RGR) and retain the UK VAT paid status of the boat. This was originally 31 December 2021 before HMRC agreed to a further six month grace period. This grace period only applies to boat owners who are unable to meet the three year condition of RGR.
Unfortunately, any UK-flagged boat which was not ‘exported’ from the UK may not be able to claim RGR if they return to the UK.
This means that any UK boat owners who wish to bring their tax-paid and EU-purchased boats back to the UK after Brexit will be subject to a second VAT payment, even if it has remained in the EU, and even if it returns before the cut-off.
On the EU side, it appears that any UK-flagged, tax-paid boat which will be in EU waters through 31 December 2020, will be deemed to be EU VAT paid.
This means these boats will not have the 18-month TI period enforced, although a transit log may be required.
The International Council of Marine Industry Associations (ICOMIA), European Boating Industry (EBI), European Boating Association (EBA), British Marine (BM) and the Royal Yachting Association (RYA) issued clarification on EU VAT and customs for recreational boat owners and companies in April 2021.
Click here to read the answer to readers’ Brexit VAT questions
VAT proof in the UK after Brexit
Boat owners cruising in the UK are being advised by Her Majesty’s Revenue and Customs (HMRC) to carry evidence of VAT status onboard their vessels ‘at all times’ in case of checks by customs officials.
The details have been published in HMRC Notice 8: sailing your pleasure craft to and from the UK, following the end of the Brexit transition period on 31 December 2020.
Owners are advised to put together evidence of VAT status, such as documentation of VAT paid, and evidence of where their yacht was at the end of the transition period, such as a confirmatory letter from a marina and maintenance invoices.
HMRC has confirmed to Yachting Monthly that customs checks would apply to all vessels, regardless of size, and documentary evidence would include the original invoice or receipt, evidence that VAT was paid at importation or invoices for material used if owners built their own boat.
For owners who don’t have these documents, HMRC said it ‘may consider alternative evidence, such as a sales invoice or any other documentary evidence, on a case by case basis.’
A registration document on its own does not prove the UK VAT status of the vessel.
HMRC said it can apply civil or criminal penalties to those who fail to account for VAT correctly, but stressed that it was committed to helping customers who need assistance or who make a genuine mistake.
Evidence, such as a receipt of mooring in a UK marina, will also need to be retained to demonstrate the location of the vessel at the end of the transition period.
Marine surveys, insurance documents and receipts for mooring fees or harbour dues would all be useful in helping to prove the age and location of a vessel.
Red Diesel use
Last year, the UK Government announced it would remove the subsidy on red diesel from April 2022, although boaters would still be able to use subsidised fuel for heating onboard.
It followed a consultation with the sailing industry and commercial boat owners after a ruling by the Court of Justice of the European Union (CJEU) in October 2018 that the UK wasn’t complying with the EU Fuel Directive by allowing leisure vessels to use marked diesel.
A similar ruling was made against Ireland, which had green diesel. From 1 January 2020, the use of green diesel to solely power pleasure boats was banned.
In the UK, most marinas sell red diesel on a 60/40 split of full and lower tax rates for propulsion, and heating or power generation
The U-turn by the Government only applies to recreational boaters in Scotland, Wales and England.
This is to ensure the UK meets its international obligations under the Northern Ireland Protocol of the Withdrawal Agreement.
It will also align with fuel used by private pleasure craft in the Republic of Ireland, which the Government believes will make it simpler for private pleasure craft users to access the fuel they need if they sail between Northern Ireland and the Republic of Ireland (and vice versa).
Currently there are no marine white diesel pumps in Northern Ireland, and demand is insufficient for commercial operators to make provision.
The Cruising Association (CA), the RYA and British Marine have now met with HMRC demanding clarity surrounding the Government’s plans for the implementation of the red diesel ban and how it intends to address the practical difficulties before June.
HMRC has confirmed that once the change does take effect, it would be illegal to buy red diesel for private pleasure craft propulsion in Northern Ireland, but fuel already present in tanks could be used without penalty.
Private pleasure craft from Northern Ireland that fill up in Great Britain (GB) in future could do so under the Istanbul Convention which will allow red diesel legitimately purchased in GB to be taken back to Northern Ireland in the main fuel tanks of a boat.
The CA has highlighted that this would involve a minimum 90 mile sail to Scotland or the Isle of Man to lawfully purchase red diesel.
Alternatively, the nearest white diesel marine pump is in Dublin, a minimum 75 mile sail. Sailors in Northern Ireland can also buy white diesel from filling stations in jerry cans where the marine rebate will not be available, and where the number of cans/journeys required for most boats would be considerable.
There are also environmental hazards and regulations associated with refuelling by this method.
The RYA is recommending that recreational boaters with marked ‘red’ diesel purchased in GB:
- Keep receipts for diesel purchased in GB, to prove that it was bought in the GB, and request that your retailer marks them “duty paid.”
- Log the date of refuelling and engine hours to reinforce these records; and
- Do not carry marked diesel anywhere other than in their craft’s main fuel storage tanks.
HMRC has said that private pleasure craft users in Northern Ireland with only one fuel tank on board for propulsion and non-propulsion will not have to pay a higher rate of duty on their non-propulsion use of diesel than they would otherwise have to pay.
The Government is intending to introduce a new relief scheme in Northern Ireland which will become effective from the date that users become obliged to use white diesel.
What will this mean for UK sailors cruising the EU with red diesel in their tanks?
The RYA’s cruising manager, Stuart Carruthers has this advice:
Now that HM Treasury has confirmed recreational boaters’ entitlement to use red diesel beyond April 2022, we are not prohibited from using marked ‘red’ diesel in the UK or in international waters.
However, you should be aware that it is possible that some EU Member States that previously took issue with the UK’s continued use of red diesel in private pleasure craft may continue to do so.
The UK is a contracting party to the 1990 Istanbul Convention.
The Istanbul Convention is intended to facilitate temporary admission into signatory states by harmonising Customs procedures and, in particular, it allows a means of transport (together with the fuel contained in the normal fuel tanks of that means of transport) to be imported into a signatory state temporarily without payment of import duties and taxes and without application of import prohibitions or restrictions.
Now that the UK is a third country, the 1990 Istanbul Convention should govern the movement of recreational vessels between the UK and the EU.
In order to rely on the Convention, a means of transport for private use must be registered in a territory other than that of temporary admission, in the name of a person established or resident in a territory other than that of temporary admission, and be imported and used by persons resident in such a territory.
For these purposes, the EU27 are considered to be a single territory.
This means that UK recreational boaters may now be able to temporarily import fuel, that is bought legally elsewhere, into the EU provided:
- the fuel is in the normal tanks of the vessel;
- the boat is registered in the UK or another non-EU state;
- the registered owner is established or resident in the UK or another non-EU state; and
- the boat is imported and used by persons resident in the UK or another non-EU state.
Although every individual member of the EU27 should recognise and apply the Istanbul Convention to such vessels, there is no guarantee that they all will (or will do so consistently).
The Istanbul Convention is similar to an EU Directive – it sets out the rules that the signatory states are supposed to implement but it does not give individuals any right of action should a particular signatory state decline to implement part or all of the Convention – only another signatory state has that capacity.
If you encounter any difficulties when using marked ‘red’ diesel abroad, the extent to which you will be able to rely on the Istanbul Convention will be determined by the national laws of the country in which the ‘offence’ has been committed.
When visiting an EU member state, the RYA recommends that recreational boaters with marked ‘red’ diesel purchased in the UK:
- Keep receipts for diesel purchased in the UK, to prove that it was bought in the UK, and request that your retailer marks them “duty paid”.
- Log the date of refuelling and engine hours to reinforce these records; and
- Do not carry marked diesel anywhere other than in their craft’s main fuel storage tanks.
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What does Brexit mean for me?
Q. I bought my boat in the UK and have a VAT receipt. My boat is currently in Greece, where it has been for 10 years. I had planned to bring the boat back to the UK to keep or sell in the next few years. What should I do?
A. You have until 30 June 2022 to get your boat back to the UK.
If you return after this date, you will be liable to pay VAT again, based on a new valuation of your boat.
However, if your boat remains in Greece through 31 December 2020, it will be deemed to be EU VAT paid.
If you then return the boat to the UK before 30 June 2022 you can claim RGR and retain your UK VAT paid status.
It would seem in this scenario that you retain both EU and UK tax paid status.
If you then decide to move your boat back to EU waters, you must return it to the UK within three years to claim RGR again.
Likewise, you cannot stay outside the EU for more than three years without losing the EU VAT paid status.
It should be said though, that in recent years most EU countries (including the UK) showed little interest in re-taxing vessels which have been away for more than three years under the same ownership.
This may change.
If you sell the boat in the UK, it will lose the EU VAT paid status, but will retain UK VAT paid status.
Q. I am looking to buy a yacht in France and flag it under British registry. What is the VAT status of the boat?
A. Assuming the seller can show proof that VAT has already been paid in the EU, then the vessel will retain that status on transfer, even if it is re-flagged to the UK registry.
As a non-EU resident you may purchase a boat free of VAT, but you must remove the vessel from EU waters within a strict period of time (usually 30 days) before it becomes liable for VAT.
If you wish to import the boat into the UK you will be liable to pay UK VAT based on a customs valuation.
There is much talk on various platforms regarding re-flagging your UK boat to an EU country in order to circumvent some perceived problem in keeping it in the EU.
In short, I would say that there are numerous pitfalls to this plan, for very little gain.
Having to make an occasional trip out of the EU to reset your TI clock does not strike me as being too much of a problem.
Q. I bought my boat in France in 2010 and have a French VAT receipt. It is currently in Spain. I want to bring it back to the UK. Will I have to pay VAT on entry, even if I return before 31 Dec 2021?
A. As things stand, yes.
HMRC has said that RGR may only be obtained if the vessel was exported from the UK, even during the period when the UK was an EU member.
Q. I plan to head to the Med from the UK next year. What rules do I have to follow?
A. In the above scenarios we only considered the vessel. So, in this case, we will also show what rules the person must follow.
The vessel’s status is clear – it has 18 months in the EU before it must leave for a minimum of one night.
The clock will start from when you first enter the EU, so logically that would be in northern France, where you will get a transit log for the boat.
Morocco, Tunisia, Gibraltar, Montenegro, Albania and Turkey are all good options to ‘re-start’ the importation period.
The person, though, may only spend 90 days in any 180-day period in the EU.
So say you make a leisurely cruise down the Atlantic coast of Europe, and your personal ‘Schengen clock’ started in northern France, after 90 days you must either leave the boat somewhere and return to the UK for the next 90 days, or you could plan to spend that time on the boat in a non-Schengen country.
In addition to the countries listed above, you could also consider Croatia as even though it is part of the EU, it is not yet part of the Schengen area.
The same goes for the Spanish enclaves of Ceuta and Melilla, and Cyprus.
This ‘Schengen dance’ must be followed the whole time you are on the boat.
Q. My boat is in Greece and I plan to cross the Atlantic in 2021/2022. I worry about the 90-day limit to sail from Greece to leaving the Canary Islands. What can I do?
A. It is tricky. The last thing any sailor needs is external time pressure to interfere in your cruising decisions but it is what other non-EU sailors have had to manage for many years.
Some UK cruisers who have based their boats in the Med for a number of years have successfully applied for some form of residency or long-term visa.
This effectively discounts the time you spend in that particular country from your 90-day limit.
It is possible that individual countries will continue to look favourably on UK travellers and offer some form of long-stay visa, but this is by no means a given.
It is also possible that the EU will provide an extended ‘touring visa’, but this is unlikely to be available in the near future.
That means that you have two main options:
1. Start early in the season from Greece and head west, and then park your boat, maybe in Spain, and return to the UK.
You will need to calculate the date that you want to leave the Canary Islands, and count back to work out the earliest time you can return to Spain, such that in the 180-day period before leaving the Canary Islands, you have not spent more than 90 days in the Schengen area.
On the plus side, the French and Dutch islands in the Caribbean are not in the Schengen area.
2. Along your route out of the Med consider making up some of your westward miles in Tunisia, Gibraltar and Morocco, which will give you more time to be in the Canary Islands.
You need to keep a ‘countback’ of the last 180 days to ensure you do not overstay in the Schengen area.
Remember that you may want to allow for some flexibility in your departure date so that you are not under too much pressure to embark on your transatlantic voyage.
Q. I couldn’t get out to my boat in southern Italy this year, but I would like to bring it back to the UK next year. What is the best way to do this?
A. Basically, the main constraint is the 90-day limit, not on the boat, but on you and any other UK crew you have.
There are two main options to consider, but with the new time constraints you will need to plan carefully.
When you have made your decision on which route you will take, it would make sense to move your boat from southern Italy close to the ‘start point’ for your route home before taking a ‘Schengen break’.
This will maximise your 90-day window to move up through EU countries back to the UK.
ABOUT THE AUTHORS
Lu and Rod Heikell are the leading pilot book authors for the Mediterranean and have cruised between the Med and the UK via both offshore and inland routes.
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The UK Government has created a guidance page for recreational sailors travelling to and from the UK by yacht.
How will changes affect cruising after Brexit?
Travel to the EU, Switzerland, Norway, Iceland or Liechtenstein will change from 1 January 2021.
That is because an agreement between the UK and EU to keep many things the same for 11 months after Brexit comes to an end.
Can I go on holiday to the EU next year?
Currently, no. As a result of the COVID-19 pandemic, travellers from most non-EU countries cannot visit except for essential reasons.
After 31 December, the UK will no longer be treated as part of the EU, so becomes subject to these rules, which apply to those of us wishing to go to Europe and go cruising after Brexit has happened.
Find the latest foriegn travel advice here.
Will I need a new passport?
No. Your current passport will be valid as long as:
- It is less than 10 years old
- And has six months left before it runs out
- (Both of the above must be true)
The six-month rule won’t apply for visits to Ireland, because it is part of the Common Travel Area.
If you need a new passport, which will be a very dark blue, the government says you should apply in plenty of time.
How long can I go for and will I need a visa?
If you’re a tourist, you’ll be able to travel to most EU countries – plus Switzerland, Norway, Iceland and Liechtenstein – without a visa.
You’ll be able to stay for up to 90 days in any rolling 180-day period, whether you are cruising after Brexit, or merely visiting as a regular tourist.
You may need a visa or permit to stay for longer, to work or study, or for business travel.
From 2022, UK nationals will have to pay for a visa-waiver scheme in order to visit many European countries.
Get health insurance for cruising after Brexit
The European Health Insurance Card (EHIC) will no longer be valid. It entitled about 27 million British citizens to state-provided medical treatment if they fell ill or had an accident in EU countries, as well as a number of others.
The government ‘urgently advises’ people to take out appropriate travel insurance with health cover before travelling to the EU.
UK state pensioners living in the EU before 31 December 2020, and UK students already on EU courses, can use their EHIC beyond 2020, but will need to apply for new cards.
Changes at passport control
You’ll no longer be able to use EU fast-track passport control and customs lanes after Brexit.
When you arrive in an EU country (except Ireland) be prepared to show your return ticket. You may be asked to show you have enough money for your stay.
It could also take longer to cross the UK border.
Mobile phone roaming charges?
The guarantee of free roaming throughout the EU, Iceland, Liechtenstein and Norway ends on 1 January 2021.
Check with your mobile provider to see if you’re likely to face extra charges when you travel. The four main UK operators have said they have no plans to reintroduce roaming fees.
The government has passed laws to protect customers, including:
- £45-a-month cap on using mobile data abroad (then you must opt-in to use more)
- Requirements for customers to be informed when they’ve reached 80% and 100% of their data allowance.
Can I drive in Europe after Brexit?
You’ll need to take your Great Britain or Northern Ireland driving licence, your log book (V5C) and valid insurance documents.
You may need extra documents to drive in EU countries – including an international driving permit or a “green card” from your insurer.
Pet passports after Brexit
Pet passports issued in Great Britain will not be valid for travel to the EU from 1 January 2021. A new system will apply from that date.
The EU has agreed that Great Britain should be given ‘part two listed’ status, allowing pets to travel within its borders.
This means that from 1 January 2021 pets travelling from Great Britain to the EU will need to have an animal health certificate (AHC).
AHCs will be issued by a vet, will be valid for four months and must be obtained 10 days before travel.
AHCs will be valid for a single trip into the EU, onward travel within the EU for and re-entry to Great Britain.
Your pet must have been microchipped and have had a rabies vaccination and a treatment against echinococcus multilicaris (a type of tapeworm).
Can I buy duty free?
Passengers from Great Britain (England, Scotland and Wales) travelling to EU countries can take advantage of duty-free shopping from January 2021.
Current duty-free limits on tobacco and alcohol, which apply only to non-EU countries at the moment, will also increase in the new year.
But there’ll no longer be tax-free airport sales of goods like electronics and clothing.
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This article was original published on 4 December and has since been updated