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The UK Ship Register & Yachts in a post Brexit environment by Duncan Swanson of Ocean Skies.
Post Brexit, the fundamental advantages of the UK Ship Register have not changed. The red duster in all its forms remains a hugely popular flag for yachts sailing within the EU and throughout the planet.
This in the main is because the underlying advantages of the UK flag remain unchanged. For those yachtsmen who have a British registered yacht, it is simply what it is. However, it is worth looking at what these advantages are as a reminder and also for those who do not know this flag:
As part of a series of UK legislative changes precipitated by Brexit, the UK Government published a statutory instrument titled ‘The Merchant Shipping (Miscellaneous Provisions) (Amendments Etc.) (EU Exit) Regulations 2018’.
This instrument confirms that the same people (both individuals and legal entities) who currently qualify for vessel registration in the UK continue to qualify after Brexit.
This means that there is no need or requirement for any yacht owner currently holding a UK registration for their vessel to change their registration on eligibility grounds.
There has been some uncertainty surrounding the status of UK registered yachts holding EU VAT paid status following Brexit. Of course it is important to remember that the British Registry and British Revenue are not connected and so VAT paid status either in the UK or the EU is not tied to the British flag.
That said, any yacht registered in any third country to the EU can sail under free circulation in the EU if VAT and any applicable EU import duty has been paid or accounted for in the EU. This being the case, the yacht is deemed to hold Union good status.
An important opportunity provided by Brexit for those with a British flag or considering getting one, is that the UK Ship Register is no longer an EU flag. This is good news for many yacht owners who are living outside the EU (and of course today that means the UK) but sailing within EU territorial waters, as it means that the UK flag now qualifies for Temporary Admission relief from VAT. This allows for 18 months cruising in the EU without payment of VAT.
A post Brexit challenge for the UK Ship Register is the whether or not UK registered commercial yachts will be able to continue charter activity within the EU. For example Greece, Croatia and Spain (for yachts under 14 metres) have prohibitions and restrictions on the charter of non-EU registered yachts in their waters.
In conclusion the UK Register of Ships will remain for most yacht owners a ‘go-to’ choice of registry moving forward. I also thought that it would be interesting to share with you, the list of qualified nationalities who are entitled to register their yacht under the UK flag. It is a surprisingly large list and the British registry extended the list last year just prior to Brexit under the section marked ‘Other Countries’. These additions to the already long list makes the British Ships Registry a secure, respected and thoroughly international flag.