VAT on Collectors Item when its a historical vehicle
Discussion
Client has an American Classic Car showroom importing vehicles from the US.
VAT is paid at the docks on import at 17.5% plus duty or where they are "historical" collectors items only 5% with no duty. The VAT is then reclaimed via the C79.
The margin scheme cannot be used as the vehicles are purchased from outside the EU and therefore the sale includes output tax at the full rate.
The question is that where the cars imported are Historical Collector's Item e.g. a 1968 Shelby with 17,000 original miles valued at £169,000 and, clearly, the car will end up with a Collector or in a museum as opposed to being used as a "normal" car will it be deemed to include VAT at the full rate when sold or is it able to be sold at a reduced Imported works of art, antique's and collectors item rate.
HMRC are stating that it is the full rate and that rules for import VAT and the rules for output tax differ and that may be but I am throwing the question out there in case anyone knows a way of arguing that a lower rate should apply.
VAT is paid at the docks on import at 17.5% plus duty or where they are "historical" collectors items only 5% with no duty. The VAT is then reclaimed via the C79.
The margin scheme cannot be used as the vehicles are purchased from outside the EU and therefore the sale includes output tax at the full rate.
The question is that where the cars imported are Historical Collector's Item e.g. a 1968 Shelby with 17,000 original miles valued at £169,000 and, clearly, the car will end up with a Collector or in a museum as opposed to being used as a "normal" car will it be deemed to include VAT at the full rate when sold or is it able to be sold at a reduced Imported works of art, antique's and collectors item rate.
HMRC are stating that it is the full rate and that rules for import VAT and the rules for output tax differ and that may be but I am throwing the question out there in case anyone knows a way of arguing that a lower rate should apply.
maxmc2 said:
...a 1968 Shelby with 17,000 original miles valued at £169,000 and, clearly, the car will end up with a Collector or in a museum as opposed to being used...
Or it may end up being thrashed around a race track in a historics class where everyone can see it? Sorry back to your question...
RichB said:
maxmc2 said:
...a 1968 Shelby with 17,000 original miles valued at £169,000 and, clearly, the car will end up with a Collector or in a museum as opposed to being used...
Or it may end up being thrashed around a race track in a historics class where everyone can see it? Sorry back to your question...
A 1968 Shelby what? If you don't mind me asking.
The 5% tax rate for vehicles now only applies to vehicles manufactured prior to 1950 or vehicles of historical importance. You may be able to make an argument that your vehicle is of historical importance although HMCR are not the easiest people to persuade.
Failing that your VAT and import duty will be calculated on the value of the car, this is normaly established by a bill of sale. It may be that your bill of sale differs from the valuation of £169,000 which may be to your advantage.
To summarise, if your vehicle is not allocated the 5% band then you will be required to pay 10% import duty on the value/purchase price of the car including shipping costs. You will then have to pay VAT at 17.5% on that total figure. Yes you pay VAT on the import duty. Who thinks this stuff up.
The 5% tax rate for vehicles now only applies to vehicles manufactured prior to 1950 or vehicles of historical importance. You may be able to make an argument that your vehicle is of historical importance although HMCR are not the easiest people to persuade.
Failing that your VAT and import duty will be calculated on the value of the car, this is normaly established by a bill of sale. It may be that your bill of sale differs from the valuation of £169,000 which may be to your advantage.
To summarise, if your vehicle is not allocated the 5% band then you will be required to pay 10% import duty on the value/purchase price of the car including shipping costs. You will then have to pay VAT at 17.5% on that total figure. Yes you pay VAT on the import duty. Who thinks this stuff up.
I thought you meant this...
But you actually mean this...
http://benzamotors.com/CarDetails.asp?VIN=8T02R205... Bumph says "it is NOT a driver, never been driven following its 12 year restoration. ".
What a shame, can't understand that mentality.
But you actually mean this...
http://benzamotors.com/CarDetails.asp?VIN=8T02R205... Bumph says "it is NOT a driver, never been driven following its 12 year restoration. ".
What a shame, can't understand that mentality. RichB said:
I thought you meant this...
But you actually mean this...
http://benzamotors.com/CarDetails.asp?VIN=8T02R205... Bumph says "it is NOT a driver, never been driven following its 12 year restoration. ". What a shame, can't understand that mentality.
That's the one But you actually mean this...
http://benzamotors.com/CarDetails.asp?VIN=8T02R205... Bumph says "it is NOT a driver, never been driven following its 12 year restoration. ".
What a shame, can't understand that mentality. Of course, 168k is dollars not pounds as in the OP..... but still a shed load of wonga for something that isn't driven. Mind you, that's not to say the new owner won't drive it of course.
I'll have to dig out and scan the slide I took at SAAC 16 in Charlotte MS way back in 1991 of a '68 GT500 for sale.... it was all original, including faded orange paint, and had original documentation to prove it was factory ordered with a 427 side-oiler (which it still had)....wasn't a wreck or rust heap by any stretch either, just needed cosmetics.... or left as is IMHO......oh yeah, cost at the time.... just $22k
bigblock said:
Failing that your VAT and import duty will be calculated on the value of the car, this is normaly established by a bill of sale. It may be that your bill of sale differs from the valuation of £169,000 which may be to your advantage.
You need to be careful here. I bought some computer kit from someone in the US who put an "Insurance" value on the paperwork with the shipment and the taxman tried to hit me for that.aeropilot said:
bigblock said:
A 1968 Shelby what? If you don't mind me asking.
An Acapulco Blue GT500KR would be my wild stab in the dark guess And no, it wouldn't qualify for 'historical importance'.
Edited by aeropilot on Friday 3rd September 13:43
Also this is their website: www.farrellsmotorsport.com
Its seems a very grey area as HMRC have only charged 5% at the docks implying that it is a historic vehicle but some people say it still comes under the second hand car scheme. If its of historic importance then we can use the margin scheme as long as no VAT has been repaid to the clients.
Thanks for the points, very useful.
maxmc2 said:
aeropilot said:
bigblock said:
A 1968 Shelby what? If you don't mind me asking.
An Acapulco Blue GT500KR would be my wild stab in the dark guess And no, it wouldn't qualify for 'historical importance'.
Edited by aeropilot on Friday 3rd September 13:43
Also this is their website: www.farrellsmotorsport.com
You'd have to be truely barking to buy that at that inflated price
maxmc2 said:
Client has an American Classic Car showroom importing vehicles from the US.
VAT is paid at the docks on import at 17.5% plus duty or where they are "historical" collectors items only 5% with no duty. The VAT is then reclaimed via the C79.
The margin scheme cannot be used as the vehicles are purchased from outside the EU and therefore the sale includes output tax at the full rate.
The question is that where the cars imported are Historical Collector's Item e.g. a 1968 Shelby with 17,000 original miles valued at £169,000 and, clearly, the car will end up with a Collector or in a museum as opposed to being used as a "normal" car will it be deemed to include VAT at the full rate when sold or is it able to be sold at a reduced Imported works of art, antique's and collectors item rate.
HMRC are stating that it is the full rate and that rules for import VAT and the rules for output tax differ and that may be but I am throwing the question out there in case anyone knows a way of arguing that a lower rate should apply.
you will NOT get any mustang to qualify for the 5% historic rate, if you do i'll quite happily contribute a £ to the lower import duty, i should think customs would be rubbing there hands with glee should someone decide to import this car, would pay for another officer that one VAT is paid at the docks on import at 17.5% plus duty or where they are "historical" collectors items only 5% with no duty. The VAT is then reclaimed via the C79.
The margin scheme cannot be used as the vehicles are purchased from outside the EU and therefore the sale includes output tax at the full rate.
The question is that where the cars imported are Historical Collector's Item e.g. a 1968 Shelby with 17,000 original miles valued at £169,000 and, clearly, the car will end up with a Collector or in a museum as opposed to being used as a "normal" car will it be deemed to include VAT at the full rate when sold or is it able to be sold at a reduced Imported works of art, antique's and collectors item rate.
HMRC are stating that it is the full rate and that rules for import VAT and the rules for output tax differ and that may be but I am throwing the question out there in case anyone knows a way of arguing that a lower rate should apply.
the system was abused by everybody importing their own historic vehicle, and as such has been clamped down hard, whilst undoubtedly a desirable car, its of no historical importance, and i also suspect the value on import could be closer to its true value, certainly if 17.5% and soon to be 20% vat, on top of the cars value, import duty and other costs is enforced
Edited by LS6wetdream on Friday 3rd September 20:34
I think we are all missing the point of the OPs question.(That includes me).
The car has ALREADY been imported into the UK and the 5% rate has ALREADY been applied(so someone in HMRC thinks it is historicaly important).
What the OP wants to know is how much VAT will have to be repaid to HMRC after the car is sold. Will it be liable for the full rate.
I suspect considering the asking price this is something the sellers may not have to worry about for quite some time.
The car has ALREADY been imported into the UK and the 5% rate has ALREADY been applied(so someone in HMRC thinks it is historicaly important).
What the OP wants to know is how much VAT will have to be repaid to HMRC after the car is sold. Will it be liable for the full rate.
I suspect considering the asking price this is something the sellers may not have to worry about for quite some time.
bigblock said:
I think we are all missing the point of the OPs question.(That includes me).
The car has ALREADY been imported into the UK and the 5% rate has ALREADY been applied(so someone in HMRC thinks it is historicaly important).
What the OP wants to know is how much VAT will have to be repaid to HMRC after the car is sold. Will it be liable for the full rate.
I suspect considering the asking price this is something the sellers may not have to worry about for quite some time.
That's right car is already in uk and we ust wanted to clarify the sale side of thingsThe car has ALREADY been imported into the UK and the 5% rate has ALREADY been applied(so someone in HMRC thinks it is historicaly important).
What the OP wants to know is how much VAT will have to be repaid to HMRC after the car is sold. Will it be liable for the full rate.
I suspect considering the asking price this is something the sellers may not have to worry about for quite some time.
LS6wetdream said:
i have re-read the op's question, and it doesn't say its already imported and they only paid %5 import duty (well done on that one, i owe you a £ it would appear)
so is the question now, how much vat would have to be paid if its sold? easy 17.5%
We just want to clarify that when it sells will there be the full rate of vat or opt to use the margin schem as it's deemed a collectors item not a carso is the question now, how much vat would have to be paid if its sold? easy 17.5%
Old post I know, ...OP did you manage to find an answer to this? Did you end up paying the full 20% sales vat or did you find a margin scheme/reduced vat scheme in line with the 5% import vat you paid on your historic vehicle imported from outside the EU? Any feedback would be appreciated!
8 years, where has the time gone 
!
The only Shelby Mustang that i have seen in the flesh ( a 69 GT 500 in that lovely blue ) was in Chingford in circa March 82. Someone in the area had recently bought one. I came up behind it one day, in my “ tweaked “ 72 MK1 3 Litre Capri.
As soon as he saw me, he booted it and the tear up was on. I can still see in my minds eye, the smoke belching off of that Mustangs rear tires and it slewing side ways as it tried to find grip !
We think that my Capri had circa 190 hp and was obviously much lighter than the Shelby, but the Mustang had the edge. But i gave him a severe fright that day!
I used to see it ocasionally and then i saw it at that years Enfield Pageant of motoring. It then disapeared.
Often wonder what became of it !
! The only Shelby Mustang that i have seen in the flesh ( a 69 GT 500 in that lovely blue ) was in Chingford in circa March 82. Someone in the area had recently bought one. I came up behind it one day, in my “ tweaked “ 72 MK1 3 Litre Capri.
As soon as he saw me, he booted it and the tear up was on. I can still see in my minds eye, the smoke belching off of that Mustangs rear tires and it slewing side ways as it tried to find grip !
We think that my Capri had circa 190 hp and was obviously much lighter than the Shelby, but the Mustang had the edge. But i gave him a severe fright that day!
I used to see it ocasionally and then i saw it at that years Enfield Pageant of motoring. It then disapeared.
Often wonder what became of it !
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