Brexit News: Removal of EU tariffs on US-origin boats from 1 Jan 2021
by Peta Stuart-Hunt 2 Dec 2020 06:04 PST
Typical US vessels include Island Packet 40 Point Break © Sue Sutherland
The final implementation of Brexit at the end of the transition period is clearly making cruising for UK yachtsmen much more complicated, but there is one potential piece of good news for UK-based yachtsmen.
The Cruising Association's Regulatory and Technical Services group (RATS) has been advising its members on the consequences of Brexit and has identified that, by the start of the New Year, the EU's tariffs on the import of US yachts will have been removed.
These tariffs have not been well publicised but they have had a significant impact on the purchase of US-origin yachts and boats in the EU. They were introduced by the EU in the summer of 2018 in retaliation for the tariffs introduced by the US on the import of EU steel and aluminium products. Included is a 25% tariff on the import into the EU of US-origin new and second-hand yachts and boats, and a wide range of other products, although not all marine products. Goods such as marine electronic and electrical products, marine safety products and sailcloth fall outside their scope. Sailcloth is probably one of the main recreational marine imports from the US.
Good news...
The good news for UK-based yachtsmen is that from the end of the Brexit Transition Period on 31 December 2020, the EU retaliatory tariffs no longer apply to imports into the UK. In the absence of a trade agreement between the UK and the USA, the UK Global Tariff scheme will apply and this removes the 25% duty on yachts and boats.
...and will we see more US marques in UK waters?
Brands such as Hinckley, Tartan, Catalina and Island Packet are all high-quality US cruising boats that have been less visible in EU waters following the imposition of the US retaliatory tariffs and might become more affordable in the UK as a result of this change. Other US brands, such as Nordhavn, have avoided the tariffs as they are not actually manufactured in the US. New Nordhavn motoryachts are built in China and imported directly into the EU without having any physical contact with the US.
VAT will still be payable on the import of US yachts into the UK. From 1 January 2021 this will be UK VAT which will not count towards the EU "Union-goods" status of the yacht. This means that for cruises within the EU the yacht will be restricted to the 18-month EU Temporary Admission period before EU VAT becomes payable, assuming that the owner is UK resident and the yacht is operated on a non-commercial basis. VAT on second-hand yachts is based on the value of the yacht when it is imported into the UK.
Even with the deflated value of the pound, the removal of the EU tariffs should make the US a more attractive market for purchasers looking for high quality yachts. On behalf of the Cruising Association's 6,300 members, RATS will continue to monitor regulatory changes that have an impact on cruising life in the UK and across the world.
For more information about the Cruising Association, visit www.theca.org.uk.