VAT is a tax on transactions, not on assets. Importing a boat from outside the UK is classed as a transaction and subject to VAT. Nothing new. Been like it for 30 years of so. Taxes paid previously or elsewhere are completely irrelevant Unless you and the boat qualify for one of the very limited reliefs - and your scenario does not qualify..
"Fairness" has nothing to do with it. It is the same for everybody in that situation so your friend is not being discriminated against. If your friend is the same person that took the boat to the EU then he c an take advantage of the transition arrangements and return the boat to the UK before June next year without paying VAT. If however he bought it in the EU, irrespective of where the original VAT was paid then there are no concessions, except possibly if he qualifies as a returning resident.
If it is really a "return" - that is a boat that was taken from the UK to one of the remaining EU states and is being brought back by the same person then there is no need to be creative - just follow the rules. If however it was purchased in the EU then it is an import and VAT is unavoidable (legally) unless the person importing it qualifies as a returning resident.
It has been said, and I am no tax expert, that an EU purchased boat can be traded to a bona fide Noriron resident via a citizen of the Republic without any tax liabiities. Similarly a Noriron resident and citizen of the UK can sell their boat if they wish in any part of the UK. No doubt if the UK tax authorities thought this was being done to evade tax they would take a dim view but a suitable paper trail and time gaps may allay their suspicions.
No doubt people who might see this as a way of avoiding VAT, but like much of the awful Protocol arrangements it has yet to be tested. As you say, if it does prove to be an exploitable loophole HMRC will find a way of stopping it.
Aim is market value, so if you have just bought the boat then what you paid, but might be adjusted to include shipping cost, for example if shipped from the US, or add in cost of any significant work carried out between the time you bought and the time you imported, or the other way an allowance for depreciation if there is a big gap between purchase and import. Alternatively they may accept a surveyor's market valuation, for example if you had owned the boat for some time and other methods do not give a reasonable value. They may also assign their own value which you can challenge.
