Importing a car into the UK

[foibles]

Hi all,

Wasn't really a suitable forum category under which I could find to post this - my query relates to importing vehicles into the UK.

I was just on another part of the forum, giving my thoughts to someone looking to import a car to the UK, when it dawned on me that there were some grey areas I did not fully understand.

In Australia, the tax on motor vehicle imports is pretty straight forward – if a vehicle is eligible for import, it attracts a 5% duty on the claimed value (which will usually be the claimed / provable purchase price, but can also be an assessed ‘market price’) and a 10% GST (VAT) – which also incorporates the cost of freight, handling, customs clearances, etc.

UK vehicle tax is a far more difficult set of rules to interpret (at least that is how it seems to me!). On face value they look simple enough….but it is when trying to clarify the grey areas that it becomes problematic.

I am hoping someone with recent, practical experience or knowledge may be able to assist me with my queries – below;

I’ll start with the bits I do not need help with;

• Vehicles pre-1950 & those 1950-1987 with no major mods - can be imported at 0% duty & 5% VAT – pretty straightforward

• Vehicles post 1987 which are not eligible as personal imports or are not Euro manufactured cars – attract a 10% duty and 20% VAT (the VAT includes shipping and handling etc) - this is also pretty straightforward

The grey areas I am hoping someone can assist me with are as follows;

1) Vehicles made in the EU. I have read here (https://www.shipmycar.co.uk/2011/01/how-much-import-duty-will-i-pay/) that such vehicles are exempt of duty, and pay a 50 pound fee instead.....plus VAT. However, I cannot see this on UK.Gov anywhere. Does anyone have prior experience with this? Let’s take the example of (say) a 2007 Maserati Quattroporte. Made in Italy. Delivered new and sold to NZ or Aus. Then shipped back to the UK – would such a car really be exempt of duty?

2) How the duty and VAT are calculated. Let’s say I buy a 1995 Nissan Skyline GTR in Japan for the equivalent of 10,000 GBP. When I import this, I would have thought that I would be charged duty at the 10,000GBP rate….and VAT on the 10,000 GBP plus shipping costs (etc) – which would work out to be around 1000 duty and 2600 VAT – total of 3600 in duty and VAT. But instead I read on uk.gov that this is based more around the actual market value of the car. So if the market value of the car IN THE UK is 20,000 – then I end up being charged 2000 duty and 4000 VAT – which is 6000. This is an appreciable difference. It’s also a little perverse in that it would have the effect of continually pushing the price of these older cars higher and higher (as the tax component serves to inflate the cost....which becomes the price). My estimation would have been that you furnish some form of evidence of what you paid for the car (such as invoice, receipt and actual bank transfer statements) - and that would serve as the basis for the taxes and duties.

Anyone with any knowledge that may be of assistance here?

Thanks in advance - Foibles

[TooMany2cvs]

foibles said:

1) Vehicles made in the EU. I have read here (https://www.shipmycar.co.uk/2011/01/how-much-import-duty-will-i-pay/) that such vehicles are exempt of duty, and pay a 50 pound fee instead.....plus VAT. However, I cannot see this on UK.Gov anywhere. Does anyone have prior experience with this? Let’s take the example of (say) a 2007 Maserati Quattroporte. Made in Italy. Delivered new and sold to NZ or Aus. Then shipped back to the UK – would such a car really be exempt of duty?

No. Because no EU VAT would ever have been paid on it. If it's registered in an EU country, then EU VAT has been paid, so VAT would not be paid on import to the UK.

foibles said:

2) How the duty and VAT are calculated. Let’s say I buy a 1995 Nissan Skyline GTR in Japan for the equivalent of 10,000 GBP. When I import this, I would have thought that I would be charged duty at the 10,000GBP rate….and VAT on the 10,000 GBP plus shipping costs (etc) – which would work out to be around 1000 duty and 2600 VAT – total of 3600 in duty and VAT. But instead I read on uk.gov that this is based more around the actual market value of the car.

If you can demonstrate that you paid £10k-equivalent on the open market, then the market value is £10k.

foibles said:

So if the market value of the car IN THE UK is 20,000 – then I end up being charged 2000 duty and 4000 VAT – which is 6000. This is an appreciable difference. It’s also a little perverse in that it would have the effect of continually pushing the price of these older cars higher and higher (as the tax component serves to inflate the cost....which becomes the price). My estimation would have been that you furnish some form of evidence of what you paid for the car (such as invoice, receipt and actual bank transfer statements) - and that would serve as the basis for the taxes and duties.

Not really - because the cost of importing would not be economically viable, so you wouldn't do it. The UK market value is not set by the cost to import, it's set by what a buyer will pay.

The £50 fee you mention applies to all cars - it's the fee for first registration.

The registration process is straightforward...
Within 14 days of import, get a NOVA certificate from HMRC - the tax man. This shows that any duty/VAT payable have been paid.
Get a V55/5 form from DVLA.
Insure it on the VIN or foreign plates.
If it's over 3yo, get an MOT on it.
If it's under 10yo and to EU spec, get a certificate of compliance from the manufacturer. You might also need to change foglight, speedo, headlights.
If it's under 10yo and not to EU spec, get it IVA tested.
Send the tax money, first reg fee and paperwork to DVLA.
Get the reg back from DVLA, get plates made, tell the insurer.
Drive.

[anonymous-user]

Does any one know the duty rate on a car that was sold new and registered in the UK, then exported out of the EU, what duty would be payable.
I have a lotus Carlton in Asia, I know where it was sold new and the UK reg number.
I'm thinking to ship it back.

[TooMany2cvs]

Berw said:

Does any one know the duty rate on a car that was sold new and registered in the UK, then exported out of the EU, what duty would be payable.

Zero. UK duty and vat would have been paid when it was new.

[anonymous-user]

Thanks that's what I thought.

[foibles]

TooMany2cvs said:

Zero. UK duty and vat would have been paid when it was new.

Is there any form of public reference from the HRMC to support this? My understanding is that if the person who took it out of the EU re-imports it, it is exempt of tax and duty - but not if it is another party altogether?