Brexit & Yacht Registration

By Duncan Swanson

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.

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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:

  • The UK is a neutral, politically stable sovereign state. The UK flag is amongst the top performing flags on the Paris MoU (Memorandum of Understanding) and Tokyo MoU ‘White Lists’ for port state control, and in fact at the time of writing the UK is the number one flag under the Paris MoU.
  • The UK Ship Register is a member of the coveted ‘Red Ensign Group’ of British ship registries which are entitled to fly the red ensign. The Ship Registry team are government funded, operated and backed and the Registry operates on a cost only basis. This makes the fees charged for registrations some of the most competitive in the world.
  • The Registry is regulated by the United Kingdom’s Maritime & Coastguard Agency (MCA).
  • The neutral nature of the port of registry marked on the stern of every British registered yacht is an asset when sailing internationally, as the flag has a reputation for being a quality register familiar to port and customs authorities the world over.
  • The Ship Registry team are committed to fast and efficient turn arounds so unless they are totally snowed under with applications, the turnaround of paperwork is quick.
  • As there are literally thousands of yachts and ships of all types and sizes on the British Register, the staff are super experienced and there is not much that they haven’t seen before.
  • Registry fees are a reasonable price with no tonnage tax or other annual ship registry fees for yachts.
  • UK registration is valid internationally and documentation issued in English and hence is widely understood.
  • UK registered yachts do not have to ever physically visit UK unlike some other registries. An example of this would be Delaware state registration which is only valid for yachts principally used in the State of Delaware.
  • It is possible to obtain a provisional registration to cover vessel for navigation immediately after purchase which is good news for yacht brokers and an owner who has just taken delivery of a yacht which has to make passage on completion of the sale.
  • Part I of the British Registry provides proof of title and enables her owner to register a mortgage on the yacht if needed.
  • A Certificate of British Registry is valid for five years and at the end of the five years the process for renewing the registration for a further five years is very straight forward.
  • British Consular services and support are available to all UK registered yachts when sailing internationally.
  • Yachts can be coded and operated as commercial charter yachts on the British Registry using the MCA regulations for commercial use.
  • The British Registry enables citizens and companies from around the world direct access to Part I of the British flag
  • The UK has minimal nationality restrictions, giving yacht owners flexibility in whom they employ as crew onboard their vessel.
  • The MCA supports yacht owners requests for use of armed guards on board UK registered yachts in piracy areas, subject to complying with risk assessments and further UK Government guidance.
  • UK registered yachts are entitled to diplomatic protection, consular assistance and Royal Naval protection depending on the availability of assets and nature of the threat.
  • The UK holds an international reputation for expert advice and guidance with a proactive leading role at IMO, EU and Quality Shipping Committees.

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.

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