There are lots of reasons why you may have considered importing your next car, instead of simply purchasing from your local dealership or even buying used from domestic classified ads. It may be the opportunity to purchase something a little more unusual or obscure that has tempted you about this route, or you might be looking to import a vehicle that literally isn’t available in the UK.
Another commonly given justification for importing a car, though, is the perceived chance to save money. You might feel that you are cutting costs already by importing, if the foreign car you’ve chosen offers a better specification for the same outlay that would be required in the UK.
It’s also been suggested in some circles, however, that you could even end up paying less tax on an imported car than you would have done if purchasing on British shores. But how can you be sure whether that would be true in your case?
Swot up on the essentials before making any decisions!
To know whether you would pay more or less tax specifically for import car insurance than that for a domestic vehicle, you need to know something about the process of importing a car into the UK in the first place.
The GOV.UK website provides comprehensive guidance on importing vehicles into Britain. In a nutshell, if you’re bringing a vehicle into the UK from another country for permanent use on UK roads, you’ll need to inform HM Revenue & Customs (HMRC) of this within 14 days of the vehicle’s arrival.
This involves the use of something known as the Notification of Vehicle Arrivals (NOVA) system, with NOVA notifications able to be made online or on paper by completing the form VAT NOVA1.
It is once you have done this, that HMRC will tell you whether you need to pay any VAT, duty or road tax – and if so, how much.
What factors determine how much I’m required to pay?
Exactly what and how much you will need to pay will hinge on such factors as where you imported the car from, and your reasons for importing it.
If, for instance, you’re importing a vehicle from the European Union (EU), and it is intended simply for your personal use, you’ll only need to pay VAT, directly to HMRC. This will also be the case if you’ve imported an EU vehicle for a business that is not VAT registered.
Those importing a car from the EU for a firm that is VAT registered, meanwhile, will also only be required to pay VAT, but this will be done on their next VAT return.
Oh, and you won’t need to pay VAT at all on a car imported from the EU if the VAT has already been paid in the UK or any EU country, the vehicle has been in use for more than six months, and the vehicle has already done more than 6,000 kilometres (about 3,728 miles).
What about if I’m importing from further afield?
Those importing a car from outside the EU might not have to pay any VAT or duty at all – for example, if they’re moving to the UK with their existing vehicle, and they qualify for relief.
If, though, you’re already permanently based in the UK and are importing a non-EU car for permanent use in the UK, there’s a good chance that you will need to pay both VAT and duty to HMRC at the UK border, with the car not being released by customs or able to be registered until this has been paid. Again, the GOV.UK website provides all of the key details.
Bear in mind that tax won’t be your only additional cost
Even if your tax bill for your newly imported car looks good, it’s crucial to take account of any other costs you may incur as part of the acquisition and/or ownership experience.
Sadly, for example, high insurance costs alone can sometimes cancel out any financial benefit you would have otherwise stood to gain from importing.
That’s why it may be well worth seeking out trusted companies that can help you to save money on import car insurance, such as MoneyBeach, when you’re assessing whether importing your next car really is the best step to take for your own needs.