Car Tax, VAT and EU laws - any advice?
Car Tax, VAT and EU laws - any advice?
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London Gt3

Original Poster:

1,072 posts

271 months

Sunday 22nd April 2007
quotequote all
Although this is off topic, I hope the moderators will allow it for a short while because I think the readership here may be able to help and I can’t think of a better forum to post the question.

A guy I know bought a brand new car in the UK in January 2006. It was UK registered with all taxes and VAT paid in the UK. He is the first and only owner. A short while later, about March, he took the car to Spain and spent about two months getting the car registered in Spain and on Spanish plates where he fully intended to keep it and use it. He was advised at the time that he could not recover any of his UK tax paid for the car although he also had to pay out another 14% Spanish tax (on about £100,000).

Unexpectedly, he is now going to bring the car back to the UK permanently. It still has a UK reg no although the road tax ran out in December 2006. Presumably he can just re-tax it in the UK and all will be fine in the UK.

Does he have any grounds to recover the Spanish tax paid? He seems to think not but I find this surprising that in the EU he can end up paying tax on the same car in two member states.

Any thoughts?

Thank you.

loach

3,357 posts

246 months

Sunday 22nd April 2007
quotequote all
VAT only needs to be paid once. As far as I know, where a car is concerned, once the VAT has been paid in the UK, that's it. It need only be paid again under certain circumstances if the car is moved to another EU state within 6 months, and in that instance, the UK VAT should be reclaimable. Get him to talk to a tax accountant; but there's no way VAT should be payable twice on a new car. Something wrong there.