Cruising after Brexit and sailing in Europe

There are sure signs that boating life is returning to a more even keel after the longest period of disruption most of us have known due to the COVID-19 pandemic, writes Lu Heikell.

With our glasses firmly in the ‘half-full’ mode we turn our thoughts to the prospect of 2022’s cruising season unencumbered by a complicated traffic light system determining where and when we can travel.

For some it will mean resuming trips that were planned in 2019, dropped last year and again in 2021 as uncertainty raged.

For others, it may mean bringing forward future plans on the ‘if not now, when’ principle, as people re-evaluate their work-life balance.

Many have realised that ‘working from home’ could equally mean ‘working from boat’ and are exploring these possibilities more seriously than ever.

Most of us have been paying yard and marina bills while being confined to our kitchens, and although locally-based owners have grabbed the odd short cruise, those with boats based abroad have been forced to write off a whole season or more.

Others will have postponed long-planned charter holidays.

Now, it finally looks as though we can make plans for 2022 that may hold up longer than those written in the sand at low tide.

Travelling to Europe after Brexit

Free movement

UK residents no longer enjoy free movement through the EU. Visits to the Schengen area are limited to 90 days in every 180 days.

Those planning to spend more time on board will need to develop strategies to stay within these limits.

This could mean spending some time outside of the EU Schengen area – more easily done in the Mediterranean than the Atlantic and northern EU coasts.

It could also mean planning shorter cruises and leaving your boat in different places while you return to the UK.

Schengen countries comprises all EU countries except Ireland, Cyprus, Croatia, Bulgaria and Romania.

Note that the Spanish enclaves of Ceuta and Melilla on the Moroccan coast are considered part of the Schengen area.

Gibraltar is currently not part of the Schengen area, but negotiations are still ongoing, so check before you travel.

ETIAS – The legal procedures to pass the European Travel Information and Authorisation System started in 2016, and the system is expected to be fully operational in 2024.

In order to travel in the EU it will be necessary to register your details on the system, and to pay a small fee of €7.

It is not a visa, but is a mandatory authorisation for travel, and once completed it lasts for up to three years or until your passport expires, if sooner.

The Cruising Association has 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

VAT after Brexit

Put simply, most UK boats, like non-EU boats are now subject to Temporary Admission (TA) when they enter the EU.

This allows for a stay of 18 months (extensions for up to two years are possible) before being liable to pay EU VAT.

Most countries will issue a ‘transit log’ to be kept with the vessel while it is in that country.

This must be stamped on leaving the country, and a new one obtained at the new country’s port of entry.

The boat’s TA clock can be restarted by exiting the EU, obtaining proof of doing so, such as a marina receipt, and then re-entering the EU.

This could be as soon as 24 hours later.

The EU VAT area does not include the Canary Islands, or Ceuta, Melilla or Gibraltar (subject to change). Any non-EU country can also be used.

Documents

It is worth checking your Small Ships Registration (SSR) registration as it must be renewed every five years.

Likewise passports must have at least six months’ validity beyond your trip abroad.

RYA certificates are still widely accepted as proof of competence.

You do not need an insurance green card to drive your car in the EU, and your UK driving licence will be accepted, but your car cannot spend more than six months inside the EU.

The 18-month TA ‘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 following Brexit 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 the RYA is that the three year condition for Returned Goods Relief (RGR) for recreational boats is to be waived by the UK Government by 1 January 2022.

This means that VAT will not be recharged on boats that return to the UK. It only applies to boats that have been based in the UK under their current ownership, and to vessels which are the personal property of a UK resident and are being returned to the UK for personal use.

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, any UK-flagged, tax-paid boat which was in EU waters on 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 were 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 have 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 will 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 Brexit transition period.

Marine surveys, insurance documents and receipts for mooring fees or harbour dues are all be useful in helping to prove the age and location of a vessel.

Red Diesel use after Brexit

In his 2021 Budget, the Chancellor Rishi Sunak has announced that sailors will still be able to use red diesel to propel their vessels.

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.

In Northern Ireland however, recreational boaters will no longer be able to use red diesel for propelling their craft from 1 October 2021.

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.

HMRC has confirmed that fuel already present in tanks after 1 October 2021 can be used without penalty.

Private pleasure craft from Northern Ireland that fill up in Great Britain (GB) can 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.

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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.

Cruising Europe after Brexit: Health

COVID-19

While we all hope that the worst is over, it is sensible to keep an eye on developments and to have a range of options in the plan should things flare up again.

Suitable places to leave a boat, or a place where you can hole up on board should be on the list.

If you haven’t already done so, it is worth making sure you have had all the available vaccinations and obtained the vaccination certificate this entitles you to via the NHS website or phone app.

Currently, countries have different entry requirements regarding vaccinations, quarantine, tests and documentary evidence, so make sure you have researched thoroughly before you go, and keep up to date with changes while you are there.

Insurance

The European Health Insurance Card (EHIC) is being replaced by the UK Global Health Insurance Card (UK GHIC), but your existing EHIC will remain valid until it expires and when you renew you will get the new GHIC.

You can renew up to six months before the expiry of your EHIC.

The benefits are the same, entitling you to state-provided healthcare for medically necessary treatment and is valid in all EU countries, plus Norway, Iceland, Liechtenstein and Switzerland.

You may still be expected to pay some of your costs, depending on the country’s rules.

Your travel insurance may cover a refund, so make sure your policy includes the cover you need before travelling.

Sailing to and from the UK

Anyone cruising to and from the UK needs to inform Border Force and HMRC.

The newly launched single Pleasure Craft Reporting (sPCR) online platform – www.spcr.homeoffice.gov.uk – is now the preferred option for reporting journeys for anyone leaving or entering the UK. This includes cruisers sailing from or to the Channel Islands and Ireland, as well as those sailing to or from other EU countries and the rest of the world.

The new platform is currently in ‘beta’ mode but will eventually replace the C1331 postal form and e-C1331 online forms. The eC1331 is only available as an Excel document. It has also been renamed: now renamedL ‘Pleasure craft on non-UK voyages: leaving or arriving in the UK (pleasure craft report (sPCR) fallback template.

New users of the online service – www.spcr.homeoffice.gov.uk – will first be required to complete a ‘once only’ account registration, before being required to ‘add a pleasure craft’, and then proceeding to submit voyage plan data including: Boat Registration Number, MMSI and Callsign, AIS –an AIS transponder, not just a receiver, Skipper’s details, Full names, date and place of birth, passport or travel document details for all people on board, Goods documentation and Date and estimated departure and arrival locations and times for your voyage plan.

The voyage plan must be submitted at least 2 hours but not more than 24 hours before departure.

For those concerned about giving estimates of departure and especially arrival time, the ‘beta’ version allows a two-hour range.

The Cruising Association has discussed with UK Border Force the difficulty of giving relatively precise arrival times at the end of longer passages, and the UK Border Force advice is to give your best estimate and then update your report if you believe that either your arrival place will change, or the time will be outside the range you gave.

Data can be updated online or skippers can telephone the appropriate UK Border Force Operational centre* for the area of your arrival as soon as you can reasonably do so.

Pleasure craft arriving to the UK from outside the UK (including the Channel Islands) must fly the ‘Q’ flag as soon as entering UK waters (the 12 mile limit), and unless you are told otherwise by Border Force, you should call National Yachtline on 0800 123 2012 on arrival who may give you clearance to leave, tell you to wait for a Border Force Officer or to contact one of the regional numbers below.

The ‘Q’ flag must remain flying and all crew must stay on board until you have received clearance from a Border Force Officer.

Both the eC1331 and C1331 can be found here.

The eC1331 requires a United Nations Code for Trade and Transport Locations (UN/LOCODE) for the departure and arrival points.

Some skippers have experienced problems finding the UN/LOCODE of their destination, or reported the link on the eC1331 to the UN/LOCODE is not working, and this is being looked at.

A list of UN/LOCODEs can be found here.

Alternatively skippers can write in the full name of their departure and arrival locations along with the latitude and longitude coordinates.

Sailors using the eC1331 will need to complete two forms – one of the outward voyage, one for inward voyage.

If printing out the C1331, fill in part 1 and post to Border Force at the address provided.

For the return, fill in part 2 and ring Yachtline an hour before arrival.

The number is 0300 123 2012. It is open 24 hours a day, 7 days a week

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 plan to bring the boat back to the UK to keep or sell in the next few years. What should I do?

A. If you are the original exporter of the boat then you are able to claim Returned Goods Relief and avoid paying UK VAT again on your boat when you bring it back.

It only applies to vessels which are the personal property of a UK resident and are being returned to the UK for personal use.

Originally there was a three year condition for Returned Goods Relief (RGR), but this has now been waived by the UK Government.

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.

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?

A. As things stand, yes.

HMRC has said that Returned Goods Relief may only be obtained if the vessel was exported from the UK, even during the period when the UK was an EU member.

The Cruising Association and the RYA have been working tirelessly to try to gain some clarity on this absurd situation.

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, 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.

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 Mediterranean 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 Mediterranean 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.

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