Is VRT applicable on an electric car from NI?

OU812

Thinking of changing the car & looking at an electric - in reality, I have no idea how practical this is - how does everyone get on with theirs for daily use with kids?


Anyway, I spotted a Renault Fluence electric model in a garage in Belfast at a pretty remarkable £7.5k with just 2,500 miles on it.

Did I hear something about them being VRT free?

KCross

Plug the cars details into the revenue VRT calculator.

https://www.ros.ie/evrt-enquiry

Most electric cars pay no VRT except for the really expensive ones.

Rafal

But watch out for VAT, which you may need to pay again in Ireland with such low mileage, if the car is not old enough.

macnab

You might also have to pay ongoing rent on batteries.

Satriale

Make sure you have 6000km(3729miles) on the odometer before you drive over the border or you will be liable for VAT as pointed out.

DrPhilG

Yeah I bought a Leaf in England and had to make sure it had enough miles on it to avoid vat.

OU812

So realistically, I could get this car for less than 10k?

Are the running costs high on them?

stesaurus

OU812 wrote: »

So realistically, I could get this car for less than 10k?

Are the running costs high on them?

It's an EV so very little maintenance required and electricity is cheaper than petrol/diesel so generally speaking a lot less than a similar petrol/diesel. Have you checked to make sure you don't have to pay for a battery lease on top of the 7.5k?
Also do read up on them a lot first. Limited range and no fast charging available. Search this forum for Fluence and you'll come across a few owners who'll be able to answer more specifics.

stesaurus

Also I genuinely don't know but would be interesting to find out if the below scenario worked. I've been through the full process a good few years ago but never considered this at the time

The car has less than 6000km so you need to pay VAT in Ireland but it also means you're entitled to buy the car VAT free in the UK. So 7.5k less 20% VAT meaning 6k, look up a VAT411 form. That's all straight forward, well so long as the dealer understands. But what happens if you pick the car up on a Friday afternoon and take the scenic route home, then spend the weekend getting to know your car. Maybe a trip to Galway and back etc. Then when you go to VRT the car the mileage has gone past the 6000km mark and you possibly don't have to pay the Irish VAT?

Massive hypothetical and probably not possible in an non fast charging EV but still is there a strange loophole here?

cros13

Nope... for VAT it's the mileage at the inspection that counts. I've been thinking about possibly bringing a new Tesla home from the UK via Norway to punt the mileage up.

KCross

s.welstead wrote: »

Also I genuinely don't know but would be interesting to find out if the below scenario worked. I've been through the full process a good few years ago but never considered this at the time

The car has less than 6000km so you need to pay VAT in Ireland but it also means you're entitled to buy the car VAT free in the UK. So 7.5k less 20% VAT meaning 6k, look up a VAT411 form. That's all straight forward, well so long as the dealer understands. But what happens if you pick the car up on a Friday afternoon and take the scenic route home, then spend the weekend getting to know your car. Maybe a trip to Galway and back etc. Then when you go to VRT the car the mileage has gone past the 6000km mark and you possibly don't have to pay the Irish VAT?

Massive hypothetical and probably not possible in an non fast charging EV but still is there a strange loophole here?

I think claiming the VAT back might not be that simple either. I believe there is an issue with claiming the VAT back in the UK if ALL the owners were not VAT registered and there was a full VAT audit trail and whether you get a VAT invoice etc.

If someone along the line bought the car that wasnt registered for VAT you would not be able to claim the VAT back (or at least its more difficult) or something along those lines.

If you buy it Vat free in the UK and get a zero rated VAT invoice you would have to give the UK dealer your Irish VAT number to allow them zero rate it. The UK and Irish authorities exchange this info and its a risk that your VAT number will show up as underpaid and boom... audit.
If you are not VAT registered then I dont know how you would get a zero rated VAT invoice from a UK dealer. I think you would have to pay in full and claim it back retrospectively and then pay the Irish VAT.... paperwork up to your eyes I'd say.

Basically, I would be careful about any assumptions on claiming back UK VAT.

See revenue website here:
http://www.revenue.ie/en/tax/vat/leaflets/vat-and-vrt-on-motor-vehicles.html#section58

There are all sorts of combinations depending on whether you and/or the seller are VAT registered.

stesaurus

KCross wrote: »

I think claiming the VAT back might not be that simple either. I believe there is an issue with claiming the VAT back in the UK if ALL the owners were not VAT registered and there was a full VAT audit trail and whether you get a VAT invoice etc.

If someone along the line bought the car that wasnt registered for VAT you would not be able to claim the VAT back (or at least its more difficult) or something along those lines.

If you buy it Vat free in the UK and get a zero rated VAT invoice you would have to give the UK dealer your Irish VAT number to allow them zero rate it. The UK and Irish authorities exchange this info and its a risk that your VAT number will show up as underpaid and boom... audit.
If you are not VAT registered then I dont know how you would get a zero rated VAT invoice from a UK dealer. I think you would have to pay in full and claim it back retrospectively and then pay the Irish VAT.... paperwork up to your eyes I'd say.

Basically, I would be careful about any assumptions on claiming back UK VAT.

See revenue website here:
http://www.revenue.ie/en/tax/vat/leaflets/vat-and-vrt-on-motor-vehicles.html#section58

There are all sorts of combinations depending on whether you and/or the seller are VAT registered.

You don't claim it back from the UK. You pay the price less VAT. Or at least that's how it was done for me. Buying as private also so no need for any VAT registration numbers from me. Dealer and I just signed the necessary parts of the VAT411 form and off I went to catch a boat.

KCross

s.welstead wrote: »

You don't claim it back from the UK. You pay the price less VAT. Or at least that's how it was done for me. Buying as private also so no need for any VAT registration numbers from me. Dealer and I just signed the necessary parts of the VAT411 form and off I went to catch a boat.

Interesting, so you personally have actually done that and bought the car zero rated for VAT from a UK dealer(because it was <6mths and <6k kms)?

And when you came into Ireland and registered it you paid Irish VAT at the NCT?

So, your question is if you are in the sweet spot where the car just turns 6mths old and just goes over 6k kms when you take it to the NCT for VAT/VRT check, will they then leave out VAT since its no longer considered new.

That does sound like a loophole if you managed to get the zero rated invoice without having to furnish an Irish VAT number. I suppose an eagle eyed NCT inspector should notice that your invoice had no VAT in it and question it?

Must take a closer look at age and mileage when I buy my car in the next few months!

KCross

Also note its not age or mileage for VAT.... is age and mileage. If either of them are true its considered new, I think.

So, its not good enough to just put 6k kms on the clock and then present it at the NCT centre. It also has to be over 6 months old to avoid the VAT.

So, its a tricky timing issue where you buy it in the UK at less than 6mths old and less than 6k kms and then when you take it to the NCT both of those are no longer true. Thats tricky timing to pull that off considering you are supposed to present it to the NCT within a few days of entering the country.... not impossible but tricky.

stesaurus

It was 6 years ago when I did it but yes that's the jist. I paid VAT and VRT when I got back to Ireland. It was difficult to get a UK dealer to take you serious as most won't be aware of how to go about an export of a new vehicle. I didn't have much choice at the time as the car I wanted wasn't available from a dealer here so either I imported myself or paid a premium to get a dealer here to do it.

KCross

The relevant section in the revenue docs are here:
http://www.revenue.ie/en/tax/vat/leaflets/vat-and-vrt-on-motor-vehicles.html#section58

See the example in the "New means of transport" section where it says:

Where a vehicle is first registered in the UK or NI on 2nd January and is purchased by a State resident in June and subsequently arrives in the State on 4th July and is presented for registration with 7000kms, this is not a new means of transport and therefore VAT is not chargeable.

So, that specific example is exactly what you have wondered. It seems revenue are OK with that scenario.

First registered in UK on 2 Jan, Irish person buys it in Jun (i.e. <6mths and therefore valid for a zero rated VAT invoice in the UK) and then arrives in on the ferry on 4 July (>6mths) and no Irish VAT to be paid.

Seems like it is legal based on my reading of it.

It's getting all that timing right is the key!

BoatMad

I think people are confused
Vat refund in the uk , ie vat 411 applies to " new means of transport " only . The car cannot be registered already in the uk. ( if it is but less then 6 months , you have to go through a different process, ie post transaction refund )

You present the vat 411 in Ireland and pay the vat here

There is no loophole , if you buy an unregistered new car in the uk , you must remove it from the uk within 90 60 days , so if you turn up in Ireland with an unregistered uk vat free car older then 6 months, you have broken EU VAt law and it's clear to Irish customs you have done so.

Note that it's nothing to do with being vat registered, yiu cant claim Irish vat back anyway.



Note that the only way for a uk dealer to sell you a new car is to apply vat 411 process. But many are not familiar with it , more Irish dealers are , as they sell cars to the uk from time to time. However, the dealer, if he forms a concern , may still ask you to deposit the vat and that vat is repaid to you on production of export proof. So you could still have to fund the uk vat as cash flow.

Clever minds then you in revenue have thought this through , don't go looking for loopholes, most are illegal

Ps kcross, the revenue snippet you mentioned, refers to " nearly new" uk registered cars on which vat has been paid. Hence you don't pay again

Note you can get hit for double vat , of you buy a nearly new car in the uk. You will not ( may not ) not be able to reclaim uk vat , and you will pay Irish vat. The U.K. Revenue has the right to inspect such vehicles etc.

KCross

BoatMad wrote: »

I think people are confused
Vat refund in the uk , ie vat 411 applies to " new means of transport " only . The car cannot be registered already in the uk. ( if it is but less then 6 months , you have to go through a different process, ie post transaction refund )

You present the vat 411 in Ireland and pay the vat here

There is no loophole , if you buy an unregistered new car in the uk , you must remove it from the uk within 90 60 days , so if you turn up in Ireland with an unregistered uk vat free car older then 6 months, you have broken EU VAt law and it's clear to Irish customs you have done so.

Note that it's nothing to do with being vat registered, yiu cant claim Irish vat back anyway.



Note that the only way for a uk dealer to sell you a new car is to apply vat 411 process. But many are not familiar with it , more Irish dealers are , as they sell cars to the uk from time to time. However, the dealer, if he forms a concern , may still ask you to deposit the vat and that vat is repaid to you on production of export proof. So you could still have to fund the uk vat as cash flow.

Clever minds then you in revenue have thought this through , don't go looking for loopholes, most are illegal

Ps kcross, the revenue snippet you mentioned, refers to " nearly new" uk registered cars on which vat has been paid. Hence you don't pay again

Note you can get hit for double vat , of you buy a nearly new car in the uk. You will not ( may not ) not be able to reclaim uk vat , and you will pay Irish vat. The U.K. Revenue has the right to inspect such vehicles etc.

It is the "New means of transport" sections I am looking at. From what the UK and Irish revenue websites say is that NMT means less than 6mths old from first registered and less than 6k kms. So, I read that to mean it can be already registered (typically ex-demo cars).

See UK revenue website here about VAT411 process:
https://www.gov.uk/government/publications/vat-notice-728-new-means-of-transport/vat-notice-728-new-means-of-transport#purchasing-an-nmt-in-the-uk-for-removal-to-another-member-state

That link explains the process. Why do you say that that process is not applicable to VAT411 and you have to use the "post transaction refund" process?

The idea here is that you buy an ex-demo car in the UK that qualifies as an NMT and get the dealer to sell it to you ex VAT. The dealer may not be familiar with that process or may not like to do it but that doesnt mean it cant be done or is il-legal in anyway.

Once you have that ex Vat (i.e. not claiming UK VAT back) you export it within 60 days and then present it to the NCT for VRT/VAT inspection and ensure that it is no longer an NMT (i.e. >6mths old and >6k kms). Again, nothing il-legal there.

What part of the process is wrong and I'm certainly not trying to do anything il-legal here.

colm_mcm

what you're buying us the car minus the battery, in effect.
As far as I know, Renault own the battery, and you have to lease it from them.

colm_mcm

what you're buying us the car minus the battery, in effect.
As far as I know, Renault own the battery, and you have to lease it from them.

BoatMad

kCross. In any car vat must be paid somewhere.

If you get a car u see the uk vat411 scheme, you undertake to pay the car is the country of arrival. It doesn't matter how old the car is , when you go to pay the vrt , your sales documentation will show no VAT , so revenue will ask for your uk vat411 and you will be charged Irish vat. ( I know I've done this )

The revenue concession on 6 months , is to absolve you of input vat on second hand cars , given that vat is paid elsewhere in the EU.

Vat is a transaction tax , accounted for in all purchases , sales , import , and export.

The fact that you didn't pay uk tax , means the car is not in " free circulation " in the EU , and is merely in transit to be imported into a different EU state. Once no vat has been paid , vat must be accounted for on import.

The basic vat law around NMT is that vat is payable in the country of destination not the country of purchase. Hence on a new car even if you mistakingly paid uk vat on the car, you will still pay Irish vat and have to try and reclaim the incorrect uk vat.

I used to import NMTs.

You cannot outside of certain commercial vehicles under a vat registered person , ever legitimately drive a vehicle on which vat hadn't been paid somewhere in the EU

BoatMad

kCross. In any car vat must be paid somewhere.

If you get a car u see the uk vat411 scheme, you undertake to pay the car is the country of arrival. It doesn't matter how old the car is , when you go to pay the vrt , your sales documentation will show no VAT , so revenue will ask for your uk vat411 and you will be charged Irish vat. ( I know I've done this )

The revenue concession on 6 months , is to absolve you of input vat on second hand cars , given that vat is paid elsewhere in the EU.

Vat is a transaction tax , accounted for in all purchases , sales , import , and export.

The fact that you didn't pay uk tax , means the car is not in " free circulation " in the EU , and is merely in transit to be imported into a different EU state. Once no vat has been paid , vat must be accounted for on import.

The basic vat law around NMT is that vat is payable in the country of destination not the country of purchase. Hence on a new car even if you mistakingly paid uk vat on the car, you will still pay Irish vat and have to try and reclaim the incorrect uk vat.

I used to import NMTs.

You cannot outside of certain commercial vehicles under a vat registered person , ever legitimately drive a vehicle on which vat hadn't been paid somewhere in the EU

cros13

I'm having a UK based entity purchase for me, register it, insure it, pay the UK VAT and claim the UK EV grant. I'm driving it legitimately under that reg in other EU and EEA countries... racking up 6000km on a journey I want to do anyway before importing it.

I save the difference between the Irish and UK VAT rates (3%) and gain the UK EV grant of close to €6500.
If I directly import I'm not eligible for the Irish grant because Tesla is not a registered dealer for the SEAI scheme AND none of their models are registered.

Still get the VRT credit and OMSP is assessed lower so overall I'm up €9-10k over directly importing.

KCross

BoatMad wrote: »

kCross. In any car vat must be paid somewhere.

If you get a car u see the uk vat411 scheme, you undertake to pay the car is the country of arrival. It doesn't matter how old the car is , when you go to pay the vrt , your sales documentation will show no VAT , so revenue will ask for your uk vat411 and you will be charged Irish vat. ( I know I've done this )

The revenue concession on 6 months , is to absolve you of input vat on second hand cars , given that vat is paid elsewhere in the EU.

Vat is a transaction tax , accounted for in all purchases , sales , import , and export.

The fact that you didn't pay uk tax , means the car is not in " free circulation " in the EU , and is merely in transit to be imported into a different EU state. Once no vat has been paid , vat must be accounted for on import.

The basic vat law around NMT is that vat is payable in the country of destination not the country of purchase. Hence on a new car even if you mistakingly paid uk vat on the car, you will still pay Irish vat and have to try and reclaim the incorrect uk vat.

I used to import NMTs.

You cannot outside of certain commercial vehicles under a vat registered person , ever legitimately drive a vehicle on which vat hadn't been paid somewhere in the EU

OK, so the answer is that the "VRT man" will see that no VAT is on the sales invoice from the UK and he is going to charge it regardless of whether it is an NMT or not... thats what you are saying.

I'd be curious to know if they would spot it though as it would be a rare occurrence based on the timing issues. He might look at it and see it is not an NMT on import and just assume VAT is paid.

BoatMad

I'd be curious to know if they would spot it though as it would be a rare occurrence based on the timing issues. He might look at it and see it is not an NMT on import and just assume VAT is paid.

No they specifically are interested in the VAT status.

OK, so the answer is that the "VRT man" will see that no VAT is on the sales invoice from the UK and he is going to charge it regardless of whether it is an NMT or not... thats what you are saying.

Yes, if VAT is not paid , there is no concession and you pay import VAT. ( same on everything )

BoatMad

I'd be curious to know if they would spot it though as it would be a rare occurrence based on the timing issues. He might look at it and see it is not an NMT on import and just assume VAT is paid.

No they specifically are interested in the VAT status.

OK, so the answer is that the "VRT man" will see that no VAT is on the sales invoice from the UK and he is going to charge it regardless of whether it is an NMT or not... thats what you are saying.

Yes, if VAT is not paid , there is no concession and you pay import VAT. ( same on everything )