Good news and bad news here. If you owned the car in the USA for over 6 months and lived in the USA for over a year before bringing the car in to the UK, and you promise not to sell it for a further 12 months, no VAT and Duty to pay!! Yippee! However, if you didn’t – you’ll need to pay – and that will help you decide if it’s worth doing! ALSO – you need to let HMRC know about a month in advance of your import on a form using the C104A form below, though they often respond much quicker than that.
For classic cars that meet the “historical interest” test with HMRC you will pay a combined duty and VAT cost of only 5% but you need to be careful. Your shipping agent will declare the car at the 5% rate to HMRC using the Binding Tariff Information (BTI) process. If the Binding Tariff is confirmed you will stay on 5% but if they disagree you will be charged the normal duty and VAT rates. Smart importers go through BTI before the car even starts its trip to the UK!
And you need to do all the paperwork in plenty of time. Don’t wait till the car arrives or you may incur extra charges you didn’t expect. Be ready!
Customs clearance will be required both in the US and in the UK. It takes about a week for US customs to process the title of the vehicle. Most shipping companies will handle the customs clearance at the US end for you.
In general, this means that you must have clear title of the vehicle before you attempt to ship it. In other words – it should be fully paid for.
However, I understand from one user of this site that their bank allowed them to bring a car to the UK even though the car loan was not fully paid up. In this instance I would ensure you have documentation from the bank to prove this as you may need it for customs and/or registration.
In order to avoid duty (10% for cars) and tax (Value Added Tax – VAT – of 20%) you must have owned the car for 6 months or more in the US and keep it for 1 year after you arrive in the UK. The Customs and Excise website says:
To prove that you have used your vehicle outside the EC you should bring with you any papers you have, for example:
You must also provide proof that you have possessed it outside the EC for at least 6 months. And proof you lived in the USA for a year – things like car purchase receipt, car title, ID cars, car insurance, utility bills and so on.
Beware that the duty is based on 10% of the ‘landed value’ of the vehicle. This means what you paid for the car including taxes, plus the shipping costs including insurance and handling fees! And they will ask for evidence. The VAT is 20% of the sum of the same costs plus the duty paid, which I think is a bit steep! And you’ll need paperwork to prove each cost. This means the total costs are way in excess of 30% of what you paid for the car in the first place – get a spreadsheet and work it all out before you start, is my advice!
Before you say goodbye to your car at the US end it is advisable to complete all the customs forms for the UK end. It’s easier and more relaxed this way – though it is possible to complete them when the car arrives in the UK.
Please note you need to inform HMRC that you imported a vehicle within 14 days of doing so, or you may be fined £5 for every day you are late! Again a shipping agent will avoid this kind of error and take the pain out of the process.
The process for customs clearance has got a bit harder for individuals so it’s best to use a shipping agent who will handle the paperwork, forms and work directly with HMRC to make the process easy for you. In October 2017 my favourite shipping agent is only charging around £100 for their service which sounds like a no brainer!
Whether you are doing the legwork yourself or getting help from the agent you’ll need to ‘book in’ with the shipping line to collect your car. You’ll need to have your customs, duty and VAT sorted first, then on production of the customs forms and some ID you’ll be handed the keys to you car and off you go!
You’ll need all the paperwork done and duty and VAT paid in order to get your IVA and you’ll need that in order to register the car!