Importing from the UK - definitive guide (Q and A)

Marcusm

colm_mcm wrote: »

Will a garage want to sell a new car without it getting a registration though. They may miss out on rebates etc.

The X is a registration which is reserved for export sales. Would be XA20ABC or whatever. Hopefully any rebates etc would still be available from the distributor but those are private so I have no knowledge of them.

Paul Kiernan

Marcusm wrote: »

Did you notice that I used the phrase VAT qualifying! I was very careful in my description. It is only VAT qualifying if the entire chain of ownership is through VAT registered persons. More importantly, by ensuring that the VAT is removed from the price pre-sale, any risk can be mitigated.

Actually, I didn't notice, sorry!

Nonetheless the point of my post was to point out to interested parties that -

1. Just because VAT is due in Ireland it does not mean that VAT in the UK can be avoided/reclaimed and

2. Even if UK VAT can be avoided or reclaimed it must be done at point of sale and not retrospectively.

deezell

I guess if you're liable for VAT here due to newness of the car, or if you are VAT exempt here like our previous poster who had disability exemption, do not pay the UK VAT before leaving with the car, as you could end up struggling to get it refunded. In the case of a VAT qualifying car, I'm not certain if you also need to be vat registered in this jurisdiction to get the refund from HM revenue, or just the fact of export is sufficient, (helped by the fact that UK is not part of the EU vat family anymore). In the case of a new car, as you say, dealers might just blather and say pay the VAT, you'll get it back in a week, then HM revenue says you're a private purchaser or have no VAT number or the like. Murphy's Law, if anything can go wrong, it will.
'Caveat Emptor', definitely.

monseiur

deezell wrote: »

If it's less than a 4 seater from new, which it is, and can carry more than 30% of its unladen weight, the VRT is €200. VAT will have been paid in another EU country, you may have to reclaim and pay Irish VAT at 23% given the age and low milage. If you are not registered for VAT you will have to pay private car road tax.

Hi Deezell,
Thanks for that, just catching up now due to lap top problems.
So to avoid having to pay VAT would it safer to buy say a year old van, does the fact that a van has very low mileage make a difference once a van was registered in say April 2019 ?
M.

deezell

monseiur wrote: »

Hi Deezell,
Thanks for that, just catching up now due to lap top problems.
So to avoid having to pay VAT would it safer to buy say a year old van, does the fact that a van has very low mileage make a difference once a van was registered in say April 2019 ?
M.

More than 6 months old and more the 6000 km. Under this and the vehicle, (car, van, tractor) is deemed new and liable for Irish VAT. If liable, and you are VAT registered, you can buy in the UK VAT free from the dealer if the vehicle is commercial or vat qualifying, owned by a UK VAT registered entity. VRT is calculated regardless of VAT. If you're a private individual, save yourself grief and buy a van more than 6 months old and 6000 km. That's practically a new van, and is only €200 To VRT, but might be expensive to road tax if you can't tax it as a work vehicle for your job, as private tax on a commercial van is based on the old CC rate, engine size. A VW caddy with a 2L engine will be €710 based on CC, €333 commercial. The emissions may be as low as 137gm, which would be only €280 If it was a car, so make sure you can get commercial road tax. If you're self employed trader, you'll have a VAT no. unless your volume of trade is below a threshold. I'm no VAT expert, but you can learn a lot from doing your homework. Have a read of (some of) this.

https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-transactions-motor-vehicles.pdf

L-M

I would of thought any normal person going to buy from the UK has to pay UK VAT on the purchase, and further pay Irish VAT on top of that.

Only VAT registered entities can claim back VAT on VAT qualifying Vehicles. Mad as it is, if an Irish dealer buys a VAT qualifying car and a private person buys one, the private will get the same car cheaper as the UK VaT is 20 percent where as the Irish dealer will claim back 20 but pay 23 over here

deezell

L-M wrote: »

I would of thought any normal person going to buy from the UK has to pay UK VAT on the purchase, and further pay Irish VAT on top of that.

Only VAT registered entities can claim back VAT on VAT qualifying Vehicles. Mad as it is, if an Irish dealer buys a VAT qualifying car and a private person buys one, the private will get the same car cheaper as the UK VaT is 20 percent where as the Irish dealer will claim back 20 but pay 23 over here

But you're not forced into claiming back 20% and applying 23% if the car is VAT qualifying. You can leave well enough alone. I assume a dealer can also?

L-M

deezell wrote: »

But you're not forced into claiming back 20% and applying 23% if the car is VAT qualifying. You can leave well enough alone. I assume a dealer can also?

No a Dealer would have to claim back the VAT on a VAT qualifying car, because it would be invoiced with VAT on it.

They wouldn’t claim the VAT on a VAT margin car. Most VAT qualifying cars are ex lease, hire etc

It makes nearly 600 different on a 20k. Mad really

deezell

L-M wrote: »

No a Dealer would have to claim back the VAT on a VAT qualifying car, because it would be invoiced with VAT on it.

They wouldn’t claim the VAT on a VAT margin car. Most VAT qualifying cars are ex lease, hire etc

It makes nearly 600 different on a 20k. Mad really

So when a dealer brings in a VAT qualifying car, hes looking at adding 3% more of the VAT free uk price before he makes a quid, then 23% on his margin, whereas he only has to charge vat on his margin on a non qualifying car. Why would they even bother to import vat qualifying, except maybe to sell to vat registered businesses.

L-M

deezell wrote: »

So when a dealer brings in a VAT qualifying car, hes looking at adding 3% more of the VAT free uk price before he makes a quid, then 23% on his margin, whereas he only has to charge vat on his margin on a non qualifying car. Why would they even bother to import vat qualifying, except maybe to sell to vat registered businesses.

Well it’s not 23 percent VAT on the margin. The sale price would be including VAT. It’s a Completely different type of transaction. If there was a trade in, that would then be on the VAT margin scheme.

To be fair VAT margin stuff is usually relatively new, again ex hire etc so usually better value in it.

Benefit is they can be put into stock Ex VAT and VRT so it would be a cheaper way to stock more cars.

It’s how a lot of “dodgey” garages are appearing over night and disappearing. It’s all a VAT scam. Claiming in back in the UK but not paying it here, through dodgey invoices.

deezell

So as an example, a dealer buys a VAT qualifying UK car for €20k and €4k vat, he gets the vat back, so he's paid €20k so far. He then has to sell at least at €20k plus 23%€4.6K, €600 more than a private importer,, to cover his purchase. If he wants to make a profit of a €1000, does he not have to charge 23% on this margin also? His selling price is now €21k plus 23% vat?

L-M

Yeah exactly.

All in all

Is there a sample letter for registering a car on someone elses behalf? I just want to make sure I have something sufficient for VRT process.
Thanks.

Truckermal

L-M wrote: »

Well it’s not 23 percent VAT on the margin. The sale price would be including VAT. It’s a Completely different type of transaction. If there was a trade in, that would then be on the VAT margin scheme.

To be fair VAT margin stuff is usually relatively new, again ex hire etc so usually better value in it.

Benefit is they can be put into stock Ex VAT and VRT so it would be a cheaper way to stock more cars.

It’s how a lot of “dodgey” garages are appearing over night and disappearing. It’s all a VAT scam. Claiming in back in the UK but not paying it here, through dodgey invoices.

Do the Revenue check it so with HMS Customs or what?

deezell

All in all wrote: »

Is there a sample letter for registering a car on someone elses behalf? I just want to make sure I have something sufficient for VRT process.
Thanks.

"I, Barney Rubble, authorise Fred Flintstone to register vehicle UP66URS described in the attached application , on my behalf.

Signed
Bartholomew Rubble"

That should do it. Don't forget to fill in the form VRTVPD2 to reflect this fact, and have Ids and address proof for them.

L-M

Truckermal wrote: »

Do the Revenue check it so with HMS Customs or what?

I don’t know to be honest. I bought a set of wheels through the UK last year and I had to supply a VAT number for them to invoice without the VAT. And he checked out the number, didn’t take my word for it, lol.

deezell

Sterling creeping nicely in our favour, 90.4 pence to the €, £10K will cost you €11,087 on revolut, but probably back to 90.9 On Monday, due to weekend 0.5% extra rate, which adds an extra €50 on £10k.

L-M

Seem to have cleared up the VAT thing through a friend.

If buying a car under the 6months/6,000kms threshold and not VAT registered, you need to pay the VAT in the UK and then pay it in Ireland. Once you’ve paid it hear you can then claim it back from HMRC.

So basically all it will cost is the extra 3 percent.

Galwayguy35

The UK car I bought from the dealer is only a year old and 16 k on the clock and now the DPF filter needs to be replaced.

Its under warranty but still not something I'd expect from a car thats practically new.

L-M

Galwayguy35 wrote: »

The UK car I bought from the dealer is only a year old and 16 k on the clock and now the DPF filter needs to be replaced.

Its under warranty but still not something I'd expect from a car thats practically new.

Unfortunately mechanical things have been know to break from time to time.

Isambard

possibly you've been doing lots of local runs and not getting it really hot. Seems a common problem during lockdown. My own car had the dpf warning come up, so I thrashed it for a few miles in lowish gear and it went out again

Galwayguy35

Isambard wrote: »

possibly you've been doing lots of local runs and not getting it really hot. Seems a common problem during lockdown. My own car had the dpf warning come up, so I thrashed it for a few miles in lowish gear and it went out again

Might try that.

L-M

Galwayguy35 wrote: »

Might try that.

If you’ve been told it needs to be replaced I wouldn’t try it.

If the light as come on and you’re assuming it needs to be replaced, then go on the motorway and leave it in 4th gear for 15 mins.

deezell

L-M wrote: »

Seem to have cleared up the VAT thing through a friend.

If buying a car under the 6months/6,000kms threshold and not VAT registered, you need to pay the VAT in the UK and then pay it in Ireland. Once you’ve paid it hear you can then claim it back from HMRC.

So basically all it will cost is the extra 3 percent.

Squeaky bum time when you've paid VAt twice, and don't have a VAT number...

deezell

L-M wrote: »

If you’ve been told it needs to be replaced I wouldn’t try it.

If the light as come on and you’re assuming it needs to be replaced, then go on the motorway and leave it in 4th gear for 15 mins.

Famously known as an 'Italian tune up'. Solved many a sluggish motor.

colm_mcm

deezell wrote: »

Famously known as an 'Italian tune up'. Solved many a sluggish motor.

Driving the hole off a diesel doesn’t unblock the DPF, it will make it worse.

L-M

colm_mcm wrote: »

Driving the hole off a diesel doesn’t unblock the DPF, it will make it worse.

I doubt it’s actually blocked in a year old car, more just the DPF light has come on.

Hence my previous post of if he’s been told to replace it, don’t under any circumstances drive it hard.

Paul Kiernan

L-M wrote: »

If buying a car under the 6months/6,000kms threshold and not VAT registered, you need to pay the VAT in the UK and then pay it in Ireland. Once you’ve paid it hear you can then claim it back from HMRC.

That is not correct and could lead to someone making an expensive mistake!

As outlined previously the car must be "VAT-qualifying" and the dealer must fill out form VAT411 at point of sale and not charge the UK VAT.

I stand to be corrected but AFAIK there is no way for an Irish individual to reclaim UK VAT!

deezell

L-M wrote: »

I doubt it’s actually blocked in a year old car, more just the DPF light has come on.

Hence my previous post of if he’s been told to replace it, don’t under any circumstances drive it hard.

Dpf light can come when the pressure differential pre and post exhaust rises too high, and doesn't respond to a regen, or the regen either can't occur or doesn't occur correctly. It will also come on when the differential rise returns in too short a time, indicating that the dpf is near end of life. Regen can be blocked by the car ecu if any glow plugs are faulty, or the glow plug relay has a faulty output (There are often per plug connections on the relay). Regen won't happen if the engine temperature/revs are insufficient, hence the blast down the motorway to get a regen to kick in, not to clear the dpf in itself, though it helps. A regen can occur but fail to clear a near end of life dpf. A regen can also be compromised by a clogged fuel filter, which inhibits the overfueling cycle of the regen from raising the exhaust gas temperature sufficiently. With the exception of a dead glowplug, the rest are all mostly older car problems.

L-M

Paul Kiernan wrote: »

That is not correct and could lead to someone making an expensive mistake!

As outlined previously the car must be "VAT-qualifying" and the dealer must fill out form VAT411 at point of sale and not charge the UK VAT.

I stand to be corrected but AFAIK there is no way for an Irish individual to reclaim UK VAT!

That’s exactly what I thought prior to investigating further, but a friend (Car dealer) is adamant that it’s correct.

All new cars would be VAT qualifying anyway, they wouldn’t be VAT margin.