Question to the HM Treasury:

To ask Her Majesty's Government why they are imposing a VAT charge on boats and yachts bought in the UK which are taken abroad and returned after more than three years.

Goods imported from another customs territory, including boats, are chargeable to import VAT and customs duties unless any relief applies. This is to help ensure a level playing field between goods purchased in the UK and goods purchased overseas.

The Returned Goods Relief (RGR) is a long-standing relief which provides relief from customs duty and import VAT for goods exported from the UK and returned within three years. The UK RGR provisions from 1 January 2021 also include transitional rules which allow goods which had been transported from the UK to the EU, and were located in the EU at the end of the transition period, to return to the UK by 30 June 2022. HMRC can also use discretion to waive the normal three-year return requirement in exceptional circumstances. Such requests have to be considered on a case-by-case basis.