Princess 95′ PPI Pre-delivery Inspection undertaken by EMS

Plymouth-based Princess Yachts, Britain’s largest luxury boatbuilder, has been sold to a US-based private equity firm.

Princess was put up for sale in 2022 by private equity group L Catterton, who reportedly hired bankers at Macquarie to find a buyer.

In a statement issued this morning (14 February 2023), Princess confirms that KPS Capital Partners has entered into a definitive agreement to acquire a controlling equity interest in the business.

KPS is a New York-based private equity giant that makes controlling equity investments in manufacturing companies, in North America and Europe. The firm has approximately $14.4 billion of capital under management, as of September 2022.

In 2019, KPS acquired the fitness equipment business of Brunswick Corporation, including the Life Fitness brand, for $490 million in cash.

Existing shareholders will retain ownership in Princess, with the transaction expected to be completed in the first quarter of 2023.

The moves come after the company announced expansion plans last year as part of the successful bid by Plymouth city council to create a freeport in the region. Princess says this new investment from KPS will ‘help support these plans and reinforce the unique national and international marine capabilities that reside in Plymouth and the wider South West region’.

The Princess business was founded in 1965, and distributes through a 50-strong global network. It had been backed by L Catterton and its predecessor entity since 2008.

Ryan Harrison, a partner of KPS Mid-Cap Investments, says: “We are excited to make this significant investment in Princes Yachts, a leading company in the luxury global yachting industry with an iconic brand grounded in British tradition, a remarkable and growing product range, and world-wide reputation for quality and innovation.

“KPS’ investment will accelerate Princess’ growth trajectory and fund numerous investments for its future. We look forward to working with Princess’ existing stockholders, chief executive officer, Antony Sheriff, the senior leadership team, and the talented employee base at Princess Yachts.”

Antony Sheriff, Princess Yachts‘ chief executive, adds: “We are thrilled to partner with KPS for this exciting new chapter for Princess Yachts. KPS and the Princess Yachts team are deeply committed to investing in the company’s future while continuing to further strengthen our portfolio of best-in-class motor yachts. With a current order book nearing a record $1 billion and many model lines sold into 2025, we have never been in a stronger commercial position.

“Together with KPS’ tremendous track record of manufacturing excellence and investing in leading brands, we are now positioned to take Princess Yachts to the next level of industry leadership in quality and innovation. Under KPS’ ownership, we will accelerate a range of growth and operational initiatives to build upon our long and successful history.”

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

Recreational Craft – VAT issues Post-Brexit – See below Scenario’s

Following the UK’s withdrawal from the EU, there have been many questions which have caused confusion and uncertainty for the leisure marine sector both in the UK and in the EU27. Arguably, the biggest has been around the VAT status of recreational craft at the end of the transition period. 

In a show of unity, the International Council of Marine Industry Associations (ICOMIA), European Boating Industry (EBI), European Boating Association (EBA), British Marine (BM) and the Royal Yachting Association (RYA) joined forces to provide clarification on VAT and customs for recreational boating companies and users. The five organisations have released this guidance to their members and non-members.

The group has put forward key scenarios affecting boaters (detailed below) and confirms that the European Commission has now responded, validating the interpretation of the guidance and how VAT should be applied under the various examples. This follows a push led by the EBI with the European Commission to provide this important clarification.

Positive confirmation of the scenarios should now also be recognised by each EU country in their dealings with this matter. Failure to do so could result in formal complaints being made to the European Commission. Further clarification will be sought on the documentation required and interpretation of establishment of “person established in the customs territory of the Union”.

Commenting on the collaboration, Philip Easthill, secretary general of the EBI, says: “We are delighted to have received the responses from the commission that companies and boaters urgently need. Given the impact of Brexit on businesses and supply chains, clarity on VAT for second-hand boats is highly important. The cooperation of EBI with our partners has been key and we will continue to advocate for clarity on VAT issues through our channels at EU level.”

Lesley Robinson, CEO of British Marine, adds: “Collaboratively working together with other leisure marine industry bodies is a highly successful way of collectively garnering results, and this recent clarity received on VAT issues post-Brexit will greatly benefit British Marine members and the UK leisure marine industry. The answers to these scenarios will be welcomed in particular by UK boat retailers and brokers to assist in maintaining a healthy trade of second-hand boats across the UK and EU.”

VAT issues scenario post-Brexit

The Union Customs Code referred to within this document can be found here. 

The following acronyms are used:

TPE = The time at which the transition period ended – 31 December 2020, 23:00 UTC 

VPS = VAT Paid Status: i.e. in free circulation

EU28 = EU before TPE, i.e. including UK

EU27 = EU after TPE, i.e. excluding UK

GB = England / Scotland / Wales excluding Northern Ireland

TA = Temporary Admission

RGR = Returned Goods Relief

UCC = Union Customs Code 

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

Following the release of the UK – EU Trade and Cooperation Agreement, British Marine and the Royal Yachting Association (RYA) have been working to understand the impact of various aspects of the agreement on both the marine industry and recreational boat owners.

It’s not good news. ‘Post construction assessments’ will be needed to sell pre-owned CE marked recreational craft to the EU, and vice versa. The assessments, say a joint statement, are going to cost owners between £500-5000 (dependent on the vessel).

As Howard Pridding, RYA director of external affairs, says: “This is yet another unanticipated and unwelcome aspect of Brexit which could affect many owners financially through no fault of their own. We are working in partnership with industry to better understand and mitigate the situation and potential cost burden.”

British Marine and the RYA say the new information comes from the EU Commission and the UK Department for Business, Energy and Industrial Strategy (BEIS). It focuses on the trade of pre-owned CE marked recreational craft between the UK and EU following the UK’s exit from the European Union.

Both the UK and EU have confirmed that any vessel being traded second-hand between the UK and EU will be required to meet the obligations set out in either the Recreational Craft Directive (RCD) in the EU, or the Recreational Craft Regulations (RCR) in the UK, when placed on either market after the 1 January 2021.

Therefore, this means that a pre-owned vessel being imported from the EU to be placed on the UK market will, after 1 January 2022, be required to obtain a new UK Conformity Assessed (UKCA) mark in line with the requirements of the RCR. In order to obtain a UKCA mark, a boat will require a post construction assessment and third-party verification.

Similar rules will apply when selling vessels into the EU. Pre-owned CE marked vessels which were in the UK at the time of departure, 11pm on the 31 December 2020, when exported to the EU will be required to undergo a recertification of the CE mark when being placed on the EU market. This means a boat will require a post construction assessment in line with the RCD and third-party verification.

Boat brokerages, distributors, boat owners and buyers may well be heavily affected by this post-Brexit position, as the responsibility will fall upon them to ensure a vessel meets the applicable requirements before buying and selling second-hand boats between the UK and EU. Estimated costs of post construction assessments and verification are between £500-5000 dependent on the vessel.

British Marine and the RYA are currently liaising with the European Boating Industry association in order to raise concerns with this position in Europe whilst also directly engaging with BEIS in the UK.

“As a consequence of Brexit, this is a complex and potentially difficult situation,” says Lesley Robinson, CEO of British Marine. “Faced with the process of individual boat re-certification, boat builders, brokers and consumers will be impacted in terms of both time and cost when selling and buying second-hand boats cross borders. At this stage in time, British Marine is working hard to represent affected members and seek clarification of the exact ramifications of these regulations.”

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

British Marine says it has met with the Department for Environment, Food and Rural Affairs to clarify the guidance specific to the leisure marine industry reopening from lockdown on 8 March.

It’s produced a matrix, which it says has been approved by government, detailing how British Marine members (England-only) should interpret the guidance.

Each step of the plan has a ‘no earlier than’ date, five weeks later than the previous step, to allow time to assess the impact of the previous step.

The organisation says it has clarified that, from 8 March, all forms of watersports, including the use of privately-owned craft and self-drive day hire boats for single households, can go ahead in England (subject to local navigation and harbour authority guidance). Furthermore, it has been concluded that marinas can open from 8 March to allow recreational boating to take place and boat brokerage can open in line with non-essential retail from 12 April.

This all assumes that boats allow for social distancing to take place.

The full matrix is split into seven categories: hotel boats, self drive day hire, self drive holiday hire, skippered boats, fixed trading boats, watersport activities, and private boats.

“This roadmap provides hope and reassurance, and I am pleased that the collaboration between government, other user groups and ourselves has resulted in aligned guidance for marine businesses and participants,” says Lesley Robinson, CEO of British Marine. “It is welcome news that parts of our industry should be able to re-open in time for the Easter holidays.

I am cautiously optimistic about the months ahead, based on the assumption that, as the vaccine rollout accelerates, the phased easing of restrictions is achievable.”

Guidance for Scotland, Wales and Northern Ireland differs. British Marine says it remains engaged with government on the individual plans set out by the devolved administrations.

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

Robin Baron, chairman of the Cruising Association’s RATS committee, says cruising yachtsmen are in the middle of ‘a perfect storm’.

His words come at the end of months of covid restrictions, a VAT ‘trap’ and new visa rules exacerbating everything. Amid a surge of enquiries about Brexit which has seen the CA run a seminar and respond to multiple questions from members in unfolding territory, Baron has settled on a plan to at least help members negotiate visa arrangements. He’s looking to exert pressure from within.

Since 1 Jan 2021, people can only stay 90 days in any 180-day period within the Schengen area (see below). The 180-day reference period is not fixed. It is a moving window, based on the approach of looking backwards at each day of the stay over the time period. Only absence for an uninterrupted period of 90 days allows for a new stay for up to 90 days.

“This simply doesn’t work for cruising yachts,” states Baron. “It cuts off either April and May, or August and September.” But what perplexes him is that while the UK government gave “EU citizens the right to visit for up to 180 days, our government declined to negotiate the reciprocal arrangement with Schengen.”

Baron admits that a few yachtsmen calling for extended visas or equal arrangements is probably quite low on the government’s priority list, but when added to the cacophony of noise being made by musicians and second home owners also pushing back against 90 days, he’s determined that any changes to be made include boat owners.

“My worry is that second home owners – who find themselves in the same position – will lobby successfully to have an extension, but the Cruising Association needs to make sure that any development includes people in boats and that a visa status change isn’t dependent on having a second address,” he says.

Inevitable consequences of Brexit

With the UK Government so committed to stopping freedom of movement of people, it seems no surprise that the EU’s Brexit negotiator Michel Barnier says the limited 90 / 180 visa result was one of the “inevitable consequences” of Brexit.

“I very much regretted that the British didn’t have more ambition for people’s mobility,” Barnier told reporters, specifically in reply to questions about musicians. That thwarted ambition is now trickling into everyone’s lives.

“From last March, we made fairly ambitious proposals in terms of mobility, including for specific categories such as journalists, performers, musicians and others,” he went on. “But you need to be two to make a deal.”

Now Baron is looking at ways of making a deal happen from within the EU, given the length of the UK Government’s priority list and where yacht owners are placed.

“We’ve selected countries and are working to create groundswell support to add pressure from within Schengen to allow UK yachts to visit for longer periods. We’re trying to raise localised support, from marinas and other marine trades in target countries like Spain, Portugal and Greece. We’re hoping they’ll help pressure their MPs to grant extended visas,” Baron says. “Our inland waterways section is seeking to negotiate with the Netherlands, using locals to provide influence, to try and gain extended visas.”

He recognises that this is a long-shot as “the economic picture of visiting UK yachtsmen doesn’t add up to a ton of money”, but cites Sweden’s extended visa as a good model to start with. According to Baron, several CA members are currently applying for a visa to see how the process works and identify any pinch points.

“We’ll try out the French system when that opens,” he says, “and we’re expecting the Greeks to move swiftly. Theirs is a small economy, but there are a lot of Brits with boats there.”

The VAT trap

But while Baron has a route forward – albeit lengthy – with attempts to influence visa changes, the perfect storm is raging. And Baron himself has been caught in a downpour, also known as the VAT trap.

Like thousands of other yacht owners, Baron has found himself in a dilemma. Bring his boat back to the UK and face VAT charges running into the thousands, or leave it where is it (in his case Denmark) and have cruising severely curtailed.

The problem arose from a statement made in spring 2019, when – as Baron explains – HMRC said if a boat owner paid VAT in the EU, it would be treated as if the VAT had been paid in the UK.

“Some people went to Europe and bought boats VAT paid thinking they could bring them to UK with no VAT owing,” says Baron, “as that’s what had been said.

“But in 2020, HMRC did a complete about turn. At the end of the sailing season it announced that if you’d bought a boat in the EU – and it had never been in the UK – and you bring it here, even for a day, you’ll be charged VAT.”

2021 is seen as a grace period for those who have had a boat under the same ownership in the UK and EU to get it back . . . but the boat must have visited UK waters already to be eligible, so that it’s classed as ‘returning’.

Freedom to make new rules

Baron says the ‘returned goods’ concept is a simple “cut and paste” from EU legislation which the UK Government has chosen to follow at a point when it had complete freedom to make new rules.

“It [government] didn‘t have to do it this way and most boat owners caught in the trap will simply not return their boats to the UK to the financial detriment of the UK marine industry,” he says.

While the CA’s members campaigned and lobbied their local MPs, the treasury reply was a “standard, bland response which doesn’t address the concerns of some people having to fork out substantial additional sums to bring their boat back to the UK.”

He’s less than sanguine about the government’s response.

“We’re still seeking a meeting with HMRC,” Baron says. “Brexit is down the list behind covid. The cabinet’s bandwidth is completely taken over by covid which is a much more serious problem than a few yachtsmen having to pay VAT.”

But even those who aren’t caught in the VAT trap and who can make use of the grace period are in trouble. “People with boats in the Eastern Med are ‘stuffed’,” says Baron. “Getting back with covid restrictions and the 90 days ruling may very well be difficult.”

Thousands of boaters struggling

He estimates that several thousand boaters are struggling in one or more of the storm’s pathways, but it’s hard to say definitively as he hears people’s anxieties due to restrictions, not their ‘real life experiences’. Baron’s expecting to hear more about that when covid eases and the next barrier to travel arises – insurance.

“Even if we gain an extended visa,” he says, “people will need evidence of health insurance and that will need to cover repatriation costs. That’s going to be another complication as insurance companies are reassessing everything in the light of covid . . . and lots of yacht owners are over 70.”

His final words of advice for any boat owner revolve around paperwork.

“Carry all the documents you can muster,” he says. “We don’t know what the entry requirements will be for each EU port. But I’m confident we’ll get it sorted out.”

Images courtesy of Cruising Association.

The 26 Schengen countries are Austria, Belgium, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxemburg, Malta, the Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland.

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

In a recent notice published by HMRC – Notice 8: sailing your pleasure craft to and from the UK boat owners are being told to carry ‘documentary evidence supporting VAT status . . . at all times’. This is because, post-Brexit, owners ‘may be asked by customs officials to provide evidence of [a] vessel’s UK VAT status’.

The evidence suggested by HMRC includes an original invoice or receipt, to show that VAT was paid on purchase. If an owner built the boat themselves, they’ll need to have invoices for materials used in the construction to hand.

But, as one boat owner expressed to MIN: “Who has that? I have no idea where I’d find that.”

HMRC is keen to point out that a registration document on its own does not prove the UK VAT status of the vessel, as there is no link in the UK between the registry of the vessel and the payment of VAT.

The HMRC notice continues with advice for buying boats post-Brexit.

‘When buying a used pleasure craft from any VAT registered business in the UK, you should make sure that the invoice shows separately any VAT that the business has charged to you on the supply of the pleasure craft,’ says HMRC. ‘If you are buying from a business that does not charge VAT on the transaction or from a private individual in the UK and the seller states that UK VAT has previously been paid on the vessel, you should obtain evidence from the seller that VAT has previously been accounted for.’

The notice also covers customs requirements for leisure owners who sail their crafts to or from the UK.

It answers questions about flying the ‘Q’ flag, notifying National Yachtline and about which goods need to be declared including prohibited and restricted ‘foodstuffs’.

More information can be found in the notice or by contacting HMRC by email.

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

British Marine has released an online Manufacturer Identity Code (MIC) application and search system in preparation for the end of the Brexit transition period.

After 1 January 2021, all global boat builders, including EU-based manufacturers, will have to register their MIC on the UK register to place a vessel on the GB market.

As a requirement of the Recreational Craft Directive (RCD), a MIC code forms part of a unique serial number that every CE-marked boat must have and enables manufacturers and regulators to identify each particular vessel. It also helps others to identify the country of origin, the builder and year of build of the boat. On behalf of the leisure marine industry in the UK, British Marine is appointed by the government to administer the MIC code national register.

The online system will allow all global boatbuilders to continue to register their codes and is publicly accessible, assisting boat brokers, surveyors and second-hand boat buyers to confirm a vessel’s details.

Acknowledgement to Marine Industry News

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123

Sadly, we need to report the ‘Administration’ of one of Norfolk’s oldest and most respected boat builders Windboats Marine, being founded in 1920 in Wroxham.

Extract from Letter dated 1 May 2020 …

Statement by Administrators – ENSORS, Chartered Accountants, Cambridge

Windboats Marine Limited – In Administration (the Company)

” I am writing to advise you that along with my colleague David Scrivener, I was appointed Joint Administrator of the Company on 27 April 2020 and enclosed with this letter is formal notice of our appointment.
Please note that we are licensed to act as an Insolvency Practitioners by The Institute of Chartered Accountants in England & Wales and as such am bound by the Insolvency Code of Ethics when carrying out all professional work relating to an insolvency appointment.

The current position
The Company has currently ceased trading due to the restrictions of the Covid-19 Pandemic and lockdown but trading may commence in due course and in that event please note the requirements below in relation to existing and future orders.

Goods or services supplied to the Company after the date of my appointment must only be against orders which are signed by me or one of my authorised representatives, specimens of whose signatures appear below. Goods or services delivered against these orders will be paid for on normal trade terms unless otherwise agreed.

I am not necessarily adopting contracts entered into by the Company prior to my appointment and you must obtain my agreement that undelivered goods or services ordered before my appointment are still required before you deliver them. If they are required, then you should obtain a formal confirmation signed by the approved signatories specified above.

It should be noted that services provided and goods sold and delivered by the Company after my appointment must be paid for in full and no right of set off exists against any sums due to you by this Company prior to my appointment.”

For more information contact European Marine Services Ltd. 

     Marine Surveyors & Consultants | ADR Mediation  |  Expert Witness 
www.europeanmarinesurveys.com
Tel: (44) 01603 327 123