However, the ABYA has been working with Customs and Excise for the last two years to introduce a trial scheme to help the situation whereby the VAT no longer has to be paid on entry.

And Ancasta says it’s happy to be used as a pioneer and help test the trial to help the industry move forward.

Nick Ryley, head of brokerage at Ancasta and president of the Yacht Brokers Designers & Surveyors Association (YBDSA), ABYA’s parent body, says the company sees the value of the scheme and wants to help with the learning process – both for itself and its customers.

‘ABYA is an authorised Her Majesty’s Revenue & Customs Warehouse Keeper and brokerage companies can apply to be authorised by ABYA to operate the customs warehousing scheme,’ said Ryley. ‘Ancasta jumped into the trial as quickly as possible and is being used as a pioneer. So far it’s working well. At present we have a 57ft boat ashore at Hamble which is part of the scheme and being viewed by potential customers.’

For sellers it’s much easier as they don’t need to pay VAT on their boat when bringing it into the UK and then reclaim it if the boat is then sold back outside the EU. It attracts buyers by giving them a greater choice of boats in the UK, he added.

‘It’s vital that the scheme works and ABYA needed help to make sure this happened, both for Customs and Excise and also for the individual sellers,’ Ryley commented. ‘With the systems now in place, there shouldn’t be any hiccups when the trial ends.’

The scheme is in its infancy but so far, says YBDSA chief executive, Jane Gentry, it’s making a difference for those selling their boats.

‘In the past, the VAT has sometimes been paid by the broker and then reclaimed by them, where technically it shouldn’t have been as the boat didn’t actually belong to the broker,’ she said. ‘Revenue and Customs are keen to keep a handle on the VAT as it is possible for boats to disappear into private sales with the tax not getting paid.’

Before the trial scheme, any boats coming in to the UK from outside a VAT area would have to go into a bonded warehouse in order to avoid the VAT being paid, but this doesn’t work if people want to see them and have a sea trial before they buy.

With the new system, brokers – both ABYA and non ABYA members - pay to apply to use the scheme and submit an application for a secure area at their yard, usually around the hoist area, as the VAT warehouse. Once the paperwork has been sorted out, the boat can be put into a temporary removal area – usually the rest of the boatyard.

Need to know
ABYA needs to know where the boat is at all times otherwise the VAT can be demanded by HMRC. ‘Boats can stay in the water but we prefer them to be on land, otherwise they can be stolen more easily,’ explained Gentry. ‘Once the broker has been approved to use the scheme, the boat they are selling will arrive in the customs warehouse area and a customs form will be filled in and sent off. The boat can be taken out, for example, to a used boat show, with the new area becoming the new temporary removal area.’

Once the sale has been made, the boat is moved back to the customs warehouse area. Another part of the yard can be allocated as the storage area – usually by the exit gate – and the second part of the customs form is then filled in stating where the boat is going to.

Throughout all this process, Customs and Revenue is entitled to view the boat and see if it’s still there. If the boat does get stolen, the broker is responsible for the VAT.

The only problem could be persuading boat owners that their craft can’t be moved or sailed anywhere while waiting for a sale.

‘The rules clearly state that the boat is only to be offered for sale,’ explained Gentry. ‘It’s something that’s never been done before – a similar sort of idea is used for antiques, but boats are a bit different as potential owners do want to try then out.’

So far, five boats are going through the trial and we’re very pleased with it, Gentry added. We’ve not got the final go-ahead from Revenue and Customs and the trial is still ongoing.