VAT Personal Export Scheme for cars

nzpod

Hi guys,

Wondering if anyone knows anything about exporting a car from the UK.

I looking to buy a Euro car here and export back to NZ. Much cheaper here. The scheme allows me to not pay VAT as long as I export it within one year of purchase.

I get that new cars are sold with VAT so if I buy under this scheme, I essentially get 20% off the list price. But new cars are too expensive.

But looking at used cars, I'm a bit confused. So there are two situations. Please correct me if I am wrong though.

1) VAT Qualifying used cars: these are initially sold to businesses etc who claim the VAT back from HMRC when they buy the car. So when they on sell it the VAT is still attached and can be claimed back.

So in this situation I guess it is pretty straightforward for me. Like buying a new car. I just don't pay the 20% VAT and export it. Right?

2) Non VAT Q used cars: So these cars do not have VAT attached to them. So when the dealer sells a car he pays VAT on the profit he makes right? So if he bought the car to 10000 sold it for 11000 gives 1000 profit so 200 has to go to VAT.

Can I claim any VAT back in this case?

Will appreciate any help.

Thanks so much.

System

Reading http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageImport_ShowContent&id=HMCE_PROD1_031661&propertyType=document you can not claim VAT back, you must buy it VAT free (after filling in the relevant VAT form) from a dealer that operates PES

Note the following

2.4 What if VAT is shown on the customer's invoice?

A vehicle purchased at a price including VAT will not be eligible for a refund even if the customer later exports it to a destination outside the EU.

nzpod

Thanks for the reply.

I understand that I need to buy it VAT free.

But can I claim any VAT back on used cars? I think I can if it is VAT Q, but what if it is not VAT Q?

Also what about Vat Q cars at auction?

Cheers

forgotmyname

Are you sure you can buy a car here and take upto a year to export it?
Not get 1 year use from a foreign car before you have to register it in the UK?

VAT issue aside, Have you seen the shipping costs?

The UK is far from the cheapest place to buy a car from.

And the figures for used car prices in NZ seem to match the prices over here.

You pay duty on the car when importing it to NZ depending on how long you have owned it.

Some prices i found..

$2000 shipping
Import certificate $500 - $1500.
LTSA inspection $750

Also i know they are very strict in NZ and the car will have to be spotless, Inside and out.

There was a show on TV where they transported a large vehicle for a display. They refused to allow it through because it had dirt on the inside of the wheels and under the car.

At those sorts of costs and hassle its not worth it.

If its not taxed and insured here then it maybe towed away and impounded also.

No VAT on used cars, So nothing to claim back.

The dealers pays TAX on his profits.

nzpod

Hey,

Thanks for the reply. I am 99% sure you can buy a car here VAT free as long as you export it within 365 days to a non-EU country. Under the personal export scheme. See the link in the first reply above.

The benefit for a NZ native buying a car here VAT free, using it for a year and exporting to NZ is that I don't pay VAT at the other end either. So double tax saving. The difficulty is I have had to own the car in the UK for over a year to be VAT/GST exempt in NZ. Makes timing tricky.

For example, looking a a Audi S4 £32k VAT Q-->£26k less vat which is about $52k NZD. This is 2010 model-ish with under 20k miles on the clock. Asking dealer price in NZ is $85-95k NZD. I realise this is a dealer price and not what I would get for it.

Private container shipping is about $3000NZD and your other costs are about right so extras say $5.5-6k NZD (incl shipping). So still thats max $60k NZD to get it back home

So maybe a $15-20k NZD better off buying here.

Say I sell it in 2018. The car is now 6-7 years old. 2005-6 S4 in NZ retail for 30-50k NZD. So say I sell it for 30K NZD.

I would have essentially had a sweet pretty newish car for $30k NZD after 6 years use by buying UK (using a lower estimate as a import rather than a NZ new car). On the other hand buying the car there would have cost me $50k NZD. This is just depreciation costs as running costs will be the sameish.

Does that make sense? Your thoughts?

Cheers

System

nzpod wrote: »

Thanks for the reply.

I understand that I need to buy it VAT free.

But can I claim any VAT back on used cars? I think I can if it is VAT Q, but what if it is not VAT Q?

If you are charged VAT on the invoice then you can not claim it back - regardless of whether it is Q or non-Q.

As stated in the article, if VAT appears on the invoice and you have paid it then that is the end of it , you can not claim it back.

Only people who are VAT registered can claim VAT back. The only option for non-VAT registered people is not to pay it in the first place.

nzpod wrote: »

Also what about Vat Q cars at auction?

Cheers

See https://forums.moneysavingexpert.com/discussion/2844480

I do not see an auction house keeping a stock of VAT 410 forms for you to fill in to buy VAT free.

forgotmyname

The 2nd hand price is the 2nd hand price. You cant get a dealer to knock the VAT off. Unless he discounts the car by that figure.

Export a new car then probably. But wher does it say you can use a car bought in the UK for 1 year and not pay VAT on it as long as you export it?

Sounds like something everyone would be doing. Buy a new car with 20% off sell if to a brother abroad and then bring it back a week later and reregister it?

get a VAT registered company to buy your car for you and export it?

JasonLVC

I assume the OP has read HMRC Notice 707, as this reveals most of the answers :-

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageLibrary_ShowContent&id=HMCE_PROD1_031661&propertyType=document#P44_3121

The scheme applies to both new and used cars but only where the selleroperates the Personal Export Scheme (PES).

Auction houses may not offer the scheme as too much hassle for them (they're in the business of shifting volume to dealers, not messing around with paperwork for one-off customers).

A qualifying used car is likely ex-demo, ex-lease, ex-hire car. These are sold first as new plus VAT and the owner is a business which can reclaim that VAT (only driving schools, car hir and lease firsm can reclaim VAT on new cars). When these companies sell the car it has to be plus VAT, so the used car is plus VAT when sold onto another customer.

A non-qualifying car is any other car where VAt was charged on first sale but the owner did not reclaim the VAT (so most businesses and private individuals), when these are sold or par-ex at a dealer, no VAT is charged on the sale to the dealer so when the dealer resells that car to someone else, he cannot charge VAT on it either but neither did he get charged VAT so he is not out of pocket.

JasonLVC

forgotmyname wrote: »

The 2nd hand price is the 2nd hand price. You cant get a dealer to knock the VAT off. Unless he discounts the car by that figure.

Export a new car then probably. But wher does it say you can use a car bought in the UK for 1 year and not pay VAT on it as long as you export it?

Sounds like something everyone would be doing. Buy a new car with 20% off sell if to a brother abroad and then bring it back a week later and reregister it?

get a VAT registered company to buy your car for you and export it?

It can be open to abuse but the car is given a different coloured tax disc for the 2 months and different V5/ownership documents so its hard to sell on to someone else with exposing your ruse.

It is also recorded as exported by the DVLA, if returned to the UK it will likely be picked up at the port of entry and tax assessed at that stage (unless its smuggled in via container but even then HMRC can and do check containers). There is some leakage/scams here but HMRC have recently started a crackdown following a new initiative mentioned in the March Budget.

forgotmyname

JasonLVC wrote: »

It can be open to abuse but the car is given a different coloured tax disc for the 2 months and different V5/ownership documents so its hard to sell on to someone else with exposing your ruse.

It is also recorded as exported by the DVLA, if returned to the UK it will likely be picked up at the port of entry and tax assessed at that stage (unless its smuggled in via container but even then HMRC can and do check containers). There is some leakage/scams here but HMRC have recently started a crackdown following a new initiative mentioned in the March Budget.

Thank you very very much you have now just scuppered my new business venture. Even bought the website ready . :T:T:T

Dam loophole closers :D:D

What about registering it abroad and bringing it back under a new ID?
Fake LHD conversion?
Giving all my secrets away now.

Thanks