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Old car VAT between the UK and Europe?


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#1 mariner

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Posted 13 January 2021 - 15:27

I am not trying to start another Brexit discussion here but ask a factual question to see if anybody has up to date source data.

Some art works, like a painting, have been ( I think ) free of VAT, but not all artworks are.

I read pre Brexit that art dealers were trying to sort out how to move artworks between auction locations e.g Paris and London once the UK had left the EU.

Now that has happened what is the situation with VAT on things like classic cars and race cars - which may be artworks or just a car sale ?

If I as private individual sell, say a UK based Lotus 23 ( not that I have one!) to a German buyer will they now have to pay VAT as well as import duty to buy it now?

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#2 JoBo

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Posted 13 January 2021 - 21:51

I am not trying to start another Brexit discussion here but ask a factual question to see if anybody has up to date source data.

Some art works, like a painting, have been ( I think ) free of VAT, but not all artworks are.

I read pre Brexit that art dealers were trying to sort out how to move artworks between auction locations e.g Paris and London once the UK had left the EU.

Now that has happened what is the situation with VAT on things like classic cars and race cars - which may be artworks or just a car sale ?

If I as private individual sell, say a UK based Lotus 23 ( not that I have one!) to a German buyer will they now have to pay VAT as well as import duty to buy it now?

One of the major dealers of classic cars, based in London, told me that he will go to establish a company/office in Ireland not to loose the ties to buyers/sellers in EU.

But - whatever will come- the UK will face hard times to come... :down:



#3 Doug Nye

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Posted 13 January 2021 - 22:30

As will everyone...

 

The answer to the question, I understand from my auctioneer friends who handle this kind of nonsense every day, is that if a German bought a car in the UK and took it to Germany, he’d have to pay import duty/VAT calculated on the asset value and cost of shipping.

 

The reduced rate (circa 7-8%) would be applicable for a car over 30 years old. If it happens to be under 30 years old then standard German VAT (MwSt) at c.20% is applicable.

 
The simplest way to regard the UK and its Customs relationship with the EU is now as if it were the those two variably stable nations...the USA or Switzerland. 
 
Conversely, if you went to France and bought a car you’d have to pay 5% (reduced rate over 30 years old) or 20% (under 30 years old) on asset and shipping costs.
 
Clear?
 
DCN


#4 mariner

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Posted 14 January 2021 - 09:43

Doug, thank you.

 

I recall from questions on importing a classic from the USA that the 5% lower rate is ultimately at the discretion of the HMRC as the car has to be "of historic value" as well as over 30 years old. 

 

The specific HMRC rules for countries like the USA are here 

Collectors vehicles

Classic or collectors cars will be classified under heading 9705 if they meet the criteria of legal Additional Note 1 to Chapter 97.

Those less than 30 years old are generally not considered to be classic or collectors cars. These and all other cars are classified under heading 8703.

Racing cars, which can be proven to have been designed, built and used solely for competition may be classified under chapter 97 only if they’ve achieved significant sporting successes at prestigious national or international events.

In order for vehicles (and ‘original authentic’ as opposed to ‘modern replica’ parts) to be considered as eligible for historic collector’s status within heading 9705, information must be provided dating the year of manufacture and whether any substantial changes have been made to the vehicle (as modernised, ‘hot-rodded’ or modified vehicles are excluded).

Repairing and restoring is allowed and broken or worn-out parts, accessories and units can be replaced, provided that the vehicle is preserved and maintained in its historically correct condition.

HMRC recommend that a Binding Tariff Information (BTI) ruling is obtained before such a vehicle is imported (as a BTI ruling cannot be issued for goods already presented for UK Customs import procedures).

 

and the additional note is 

 

  • Heading 9705 includes collectors’ motor vehicles of historical or ethnographic interest which are:
    • (a) in their original state, without substantial changes to the chassis, body, steering, braking, transmission or suspension system and engine. Repairing and restoring is allowed, and broken or worn-out parts, accessories and units can/have been replaced, provided that the vehicle is preserved and maintained in the historically correct condition. Modernised or modified vehicles are excluded;
    • (b) in case of motor vehicles at least thirty years old, in case of aircraft at least fifty years old;
    • © of a model or type which is no longer in production.
  • The requisite characteristics for inclusion in a collection being relatively rare, not being normally used for its original purpose, being the subject of special transactions outside of the normal trade in similar utility articles, and being of greater value - are presumed to be fulfilled for vehicles which comply with the above three criteria.
  • This heading also includes, as collectors’ vehicles:
    • - motor vehicles, irrespective of their date of manufacture, which can be proved to have been used in the course of an historic event.
    • - motor racing vehicles which can be proved to have been designed, built and used solely for competition and which have achieved significant sporting success at prestigious national or international events.
  • Parts and accessories for vehicles are classified in this heading, provided that they are original parts or accessories for collectors’ vehicles, that they are at least thirty years old, and that they are no longer in production.
  • Replicas and reproductions are excluded, unless they fulfil the above three criteria.

Edited by mariner, 14 January 2021 - 09:54.


#5 Odseybod

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Posted 14 January 2021 - 10:34

Minor digression warning. There were some rumblings a few years ago about the implications of 9705(a) on historic/collectors' vehicles already resident in the UK, both for their MOT (if required) and also their freedom from paying road tax. For example, if you put a 5-speed gearbox into your Morris Minor or added disc brakes to improve usability, would it forfeit its historic status? Likewise a larger/later engine into your1300L Escort. Not sure how or if this was ever resolved but the departure of the ECJ's jurisdiction may have helped it to be quietly shelved.



#6 Doug Nye

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Posted 14 January 2021 - 12:58

Oh, by the way, always consult a specialist - never just believe a journalist...  Ask that nice orange Mr Trump.

 

DCN



#7 bradbury west

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Posted 14 January 2021 - 16:10

Tony, it has been ruled on by the DVLA with their 40 year policy. I have the relevant docs in the  desk computer so will ping it over to you. It looks clear , as a document, but has the making of a minefield for misrepresentation, opportunism and claims of  those dreaded words original, genuine, period mods, etc. It may be worth a new thread in the vein of Jenks’ categorisations as I have come across a separate list seemingly used in the art world, and is something which would rain on the parade of some car owners.  XXX... I cannot see why it cannot be used as a qualification for legal definition of vehicle condition, especially if the insurers bought into it. My thoughts were triggered that way a while back following a couple of Doug’s MS articles last year, and then seeing by chance a couple of those Fake or Fortune artwork programmes.

XXX. Think Heritage re shelled cars, re chassised Lotuses etc etc, the list can go on, before you start looking at cars in modern historic racing, ignoring of course the beyond period spec of cars claiming genuineness.

Roger Lund

 

edit spl.


Edited by bradbury west, 15 January 2021 - 21:21.


#8 Odseybod

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Posted 14 January 2021 - 18:52

Interesting stuff, thanks, Roger.

 

I first encountered it in my Classic Cars days, when even with less exalted everyday machinery, it looked to have all the making of a first-class hotchpotch, I like to think unintended. There were lots of similar 'initiatives' floating around at the time, such as restrictring the annual mileage of 'historic' vehicles, only letting them out to play on certain days and so on (some of which I think already applies in France?). The implications of non-original modifications on the validity of insurance policies - even fitting radial as opposed to cross-ply tyres was mentioned - was also causing some head-scratching if that edict was implemented and from memory, FIVA was a bit backward at coming forward (apologies if I traduce that august body). 

 

Anyway we seem to have more important things to worry about at the moment and as you say, it probably desrrves its own thread anyway - if it deserves to be here at all.