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Q

Classic Imports: What are the Import tax and VAT rules for importing a classic to the UK from outside the EU?

A

Importing a classic car from outside the EU by Julian Marsh of Julian Marsh of www.citroenet.org.uk

HM Revenue and Customs have clarified how a car becomes eligible for a reduced rate of VAT if imported.

Normally, if a car is imported from outside the EU, it is subject to 10% import duty on the price paid (including insurance and freight charges) plus 20% VAT on the duty-paid price.

However, if the car meets the following criteria, the VAT rate may be reduced to 5%:

An article which is not 100 years old may be eligible for the scheme under this heading if it is of historical significance because of its uniqueness, or by having a direct association with an historical person or event, or is a rare example marking an important change in technical or artistic development in a particular field. Items, which were mass-produced or are merely the products of a bygone age, are unlikely to be eligible.

The list of examples shown is by no means exhaustive but gives general guidelines on the types of article eligible under this heading.

Motor vehicles that:

▪       possess a certain scarcity value

▪       are not normally used for their original purpose

▪       are the subject of transactions outside the normal trade in similar utility vehicles

▪       are of high value, and

▪       illustrate a significant step in the evolution of human achievements or a period of that evolution.

In view of the fact that a motor vehicle is basically a utility article with a relatively short life, and subject to constant technical development, then the foregoing preconditions underlying the above judgments, in so far as they are not obviously contradicted by the facts, can be taken to apply in respect of:

▪       Vehicles in their original state, without substantial changes to the chassis, steering or braking system, engine etc., at least 30 years old and of a model or type which is no longer in production

▪       All vehicles manufactured before 1950, even if not in running order.

Also included as collectors’ pieces of historical interest are

(a) motor vehicles, irrespective of their date of manufacture, which can be proved to have been used in the course of an historic event

(b) motor-racing vehicles, which can be proved to be designed, built and used solely for competition and have scored significant sporting successes at prestigious national or international events.

The above notes and criteria also apply to motorcycles.

If you wish to import a vehicle covered by the guidelines above, you are advised to phone the Classification Advice Line on 01702 366077 Option two, before making a purchase to ensure that your vehicle will be eligible for the reduced rate of VAT at import.

Leaving aside the fact that this guidance is littered with spelling, grammatical and punctuation errors, it is clear that you might have a battle on your hands if the car in question does not meet all the above criteria.

More from Julian at www.citroenet.org.uk

 

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