Why are more superyachts visiting the UK?

With thanks to Livetts, Breaking The Mould Accountancy, Sodac Law, Poole Harbour and Gunwharf Quays

Photos 2, 3 and 5 provided by Gunwharf Quays. Photo 4 provided by Tom van Oosanen/Royal Huisman

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There has been a sharp and sustained increase in the number of superyachts visiting UK shores over the past 12 months. It’s a trend that has been welcomed by British marine businesses but has caused intrigue among yachting professionals elsewhere in the world.

On the face of it, the United Kingdom is not a traditional yachting destination. Its typically cooler and wetter climate is a sharp contrast from the warm and sunny weather owners and charter guests tend to crave. Exclusive beaches are at a premium and only the hardiest of souls would fancy a scuba diving excursion in the English Channel.

But clearly, there are different attractions that are enticing the world’s superyacht set to the UK. The magnetic appeal of London is obvious, but what are the other reasons behind the country’s flourishing popularity?

Yachting Pages explores the details behind the recent surge of superyacht visitors to British shores, tapping into the specialist knowledge and experience of local marine businesses at the heart of the upsurge.

The abiding attraction of London to superyacht owners

Despite the aforementioned drawbacks in terms of climate and weather, the UK has one very obvious, superficial selling point right from the outset: the bright lights of London.

England’s metropolis is the home of big business and hosts an array of top-level sporting, fashion and celebrity events throughout the year. The world’s wealthiest and most influential people gravitate to such occasions, including superyacht owners and charter guests.

Edward Livett, a director at London-based marine services provider Livetts, told Yachting Pages that prominent events and the exciting marketing opportunities available along the Thames are two reasons why so many superyachts are making their way to the UK.

Livetts owns Butler’s Wharf Pier on the Thames, a popular visitor mooring location, and has assisted hundreds of yachts across its 30-year history. The company has a deep understanding of the British yachting scene and has a firm handle on the reasons behind the wave of new arrivals.

“The owners of the yachts often have affiliations to large-scale events hosted in London,” Livett said. “Whether it be sporting or fashion, it’s usually no coincidence if there is a big NFL game on at Wembley that there will be a superyacht on the Thames.

“Often the owners will host large parties on board, and having the boat moored in an iconic location on the Thames gives the event a point of difference. It’s the perfect excuse to mix business and pleasure.

“The Thames is highly recognisable and iconic. Quite often the scale of the visiting yachts are such that they warrant a Tower Bridge lift. The photo and video content you get from a Tower Bridge lift is unrivalled in the yachting world in my opinion. It’s the perfect way to show off a new paint job or complete new build.”

At this point everything is easy to understand: big events attract wealthy, high-profile attendees. It’s what London is renowned for. But events and photo opportunities alone are unlikely to explain the significant and prolonged upturn in superyachts visiting the UK. It’s not like London is hosting twice as many eye-catching events now compared to previous years – in fact the pandemic has had the opposite effect – so the reality must lie beneath the surface.

It should be noted that many superyacht owners will have business interests in the UK, so that would account for some visits, but in the burgeoning world of remote working, it’s clearly only a minor contributing factor. The same applies for owners with property in the UK; their fleeting visits to the country are unlikely to be a significant catalyst for the increase the country has seen in 2021 and 2022 so far.

It begs the question: what other factors are at play?

The positive effects of Brexit on yachting in the UK: taxes, refits and English law

As is often the case with wealthy businesspeople, the answer revolves around what makes the most business sense. Ultimately owners will go where they can enjoy the greatest benefits – and the UK has become a prime location in that regard since Britain departed the European Union (EU) on 31st December 2020.

Updated regulations since Brexit, coupled with the vast maritime law experience of British firms, has transformed the UK into a preferred yachting destination for many owners.

A number of luxury superyachts have opted to spend the 2021/2022 European winter season in London, with Royal Huisman’s 58.5-metre (192-foot) PHI, Amels’ 83-metre (272-foot) Here Comes The Sun and Oceanco’s 109-metre (358-foot) Bravo Eugenia among the yachts to have set up base.

Alasdair Milroy, owner of Breaking The Mould Accountancy, explained to us the impact Brexit has had on the industry and why it’s transformed the UK into such an attractive option.

“Britain leaving the UK on 31st December 2020 created changes in the fiscal and flag landscape for superyacht owners. Before this the UK was an EU member; on 1st January as a non-EU country both UK resident [including those using the non-domicile regime] and other non-EU resident owners could register the yacht under UK flag and then enter the EU under the Temporary Admission rules.

“Other yachts may return to reset the Return Good Relief rules which allowed three years for goods to return if they were outside of the UK on 31st December 2020 and VAT had been paid in the UK at an earlier date, retaining their free circulation status.”

Dilara Dayioglugil, founder and consultant at Sodac Law, expanded on this point. She drilled down into the specifics of how taxes and VAT will affect UK yacht owners moving forward – and why it means they may return to the UK more often, or alternatively not leave the UK much in the first place.

“As non-EU residents, UK boat owners can claim Temporary Importation Relief (TIR) in the EU for 18 months, after which they will need to take their boat out of the EU before Customs duty and VAT become due. However, this 18-month exemption period can be renewed endlessly by leaving the EU every time and restarting the TIR clock.

“This would allow any individuals who are permanent residents or citizens in the UK to sail into the EU Customs area without paying import VAT. However, if the yacht sails into the UK, Her Majesty’s Revenue & Customs (HMRC) will demand UK import VAT.

“Despite Brexit and all the changes we are reading about in the news, it has been a great development for the superyacht sector, and now the country has become on trend for superyachts.”

Yacht refits in the UK

Dayioglugil expressed a further two key influencing factors: UK refits and the certainty of English law and contracts.

“The biggest potential side effect of Brexit is that the UK has now become a destination for refits for non-UK flagged yachts. Yachts leaving refit in Northern Europe have traditionally made a voyage to Norway in order to clear out of the EU before re-entering. As of the UK's exit from the European Union, these yachts will now be able to enter the south, that is, the UK. They can also buy fuel much cheaper, stock up on supplies and also take part in a guest trip in London at the same time.

“In addition, now any qualifying superyacht can reduce its tax exposure by applying for an Inward Processing Exemption from VAT on any repair expense. However, for the yacht to be able to maintain EU VAT paid status, firstly a superyacht must return to the EU within three years, and secondly it must be in substantially the same condition as when it left the EU.

“A major refit could punch a hole in this with a possible VAT charge on re-importation into the EU, calculated on the value of the repair job. However, for non-UK yachts which are benefitting from Temporary Importation Relief in the EU, the problems of Returning Goods Relief will not apply to them and in those circumstances, VAT-free refits in the UK begin to look attractive.”

Certainty of English law and contracts

“Individuals who would like to build new yachts, charter, buy or sell yachts – or do anything which requires a contract – are still making the agreements according to English law,” Dayioglugil said.

“It’s relatively easy to assess a shipowner's exposure to risk and potential liability under a charter party that provides London arbitration in accordance with English law. This is because English law has many court orders and arbitration awards that can be used to assess such risk and liability in commercial and maritime matters.

“Although the December 2020 Agreement [EU-UK Trade and Cooperation Agreement] does not contain any information on the law of contracts and judicial processes, it is certain that Brexit has not reduced confidence in English law.”

These key developments, ironically prompted by a Brexit agreement that has caused chaos and confusion in other industries, has altered the yachting scene immeasurably. Suddenly there are a number of convincing reasons for superyachts to visit or stay in the UK, and we’re seeing many owners opting to exploit it.

The Channel Islands appear to be thriving too. They have their own USPs, but they may also be profiting from the UK’s situation, as Milroy pointed out to us.

“The Channel Islands of Jersey and Guernsey have seen an increase in visits from superyachts,” he noted. “They’re easy to reach on the way south and before crossing the Bay of Biscay, allowing for weather planning as well as duty-free refuelling and leaving the EU to reset the Temporary Admission periods.

“Yachts of UK owners looking to travel to the Caribbean or the EU ports in the Mediterranean can also use delivery to the Channel Islands for fiscal purposes. Both Jersey and Guernsey have their own registries which belong to the highly regarded Red Ensign Group registries.”

Interestingly, Milroy also observed that the UK is an advantageous destination for crew members as well as owners. The plethora of crew training providers and certification opportunities make it a productive place to be.

Superyacht facilities in the UK

In the UK there are a number of marinas and mooring locations across the south of England that meet the high-quality requirements of superyachts. Many visiting vessels opt to moor in the Thames for at least some of their stay, utilising facilities such as the aforementioned Butler’s Wharf Pier, while a great number also head to coastal locations across Dorset, Devon and Cornwall.

Among the superyacht-ready ports in this region is Poole Harbour, a destination full of character and steeped in history. Ideally located on the south coast, Poole Harbour is a leading choice for superyachts before or after a voyage to London.

“Poole Harbour has been developed over hundreds of years, and has become the perfect location for superyachts,” port manager Kerrie Gray explained. “From the roads of our historic Old Town, to the blissful Blue Flag beaches of Sandbanks, visitors are sure to enjoy their stay in this iconic port.

“Being in the centre of England’s south coast, our location plays nicely into the hands of captains and yacht owners stopping over en route to refit, or new builds making their maiden voyage from the shipyard. North European cruising has a new starting point; visitors can enjoy the breath-taking Jurassic Coast, take in the white cliffs of Dover, drift past the Scottish Highlands and beyond.”

It’s not just the tried and tested British ports that are benefitting from the increased number of superyachts: Gunwharf Quays in Portsmouth, Hampshire, is another destination being chosen as a stop-off by visitors. In 2021 it enjoyed a record year of visits, and its assistant managed operations manager Mark Collings is delighted with the Quays’ growing popularity – and he’s confident it will go from strength to strength in the years ahead.

“2021 saw an unprecedented level of enquiry for superyacht berthing, and Gunwharf Quays has been delighted to welcome a record number of 11 superyachts in a year. Many of our superyacht guests have taken advantage of being able to stop in the UK in transit to and from the yards in Northern Europe.

“With our easy access berthing and a welcoming marina team we have built great relationships with agents and captains alike, and our 2022 bookings are already looking stronger than ever.”

Will the UK trend become normality?

Trends are nothing new. One year certain destinations are hot, the next they’re not. That’s the nature of the world we live in.

Based on the evidence, however, the UK’s newfound popularity doesn’t appear to be a fad. The reasons why yachts are visiting are compelling and unmoving: the reality of Brexit combined with the financial advantages, refit opportunities and enduring allure of London are irresistible to owners.

A-list celebrities are also demonstrating advocacy for the UK. In 2021, Hollywood star Tom Cruise was spotted aboard 68-metre (223-foot) Nobiskrug superyacht Triple Seven in various locations around the south coast of England and as far north as Edinburgh in Scotland, with the Mission Impossible actor keen to make the most of everything the UK has to offer.

During his stay on board, he made several trips by tender to the mainland and enjoyed a number of prestigious sporting events in and around London, including the Wimbledon tennis championships, the British Formula 1 Grand Prix at Silverstone and the Euro 2020 final at Wembley.

His stay proved that the UK is not just an ideal destination for owners; it’s a haven for discerning charter guests too.

It’s clear the escalating number of superyachts descending on the UK is a significant development within the industry. It has brought business, money, influence and empowerment to the country and put the UK firmly on the global superyacht map.

The evolution remains in its infancy, but it’s only likely to accelerate as time progresses and more superyachts utilise the advantages of visiting. The UK is the new place to be.

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