VRT and VAT

Isityourself

Hi all.
I recently bought a car in UK that a late 2016 but has 2300 genuine miles-car was a demo. Presented it to the VRT office and they couldn't find the specific car on the system. Anyway, fast forward to today and they got back to me with a VRT total of 5k, which i had an idea it would be. But they also want me to pay about 4000 euro in VAT because the car has less than 6000KM on it. Probably my fault for not knowing this as it does say it on the revenue website but i had never heard of it before to be honest and this isn't my first car to import. If i pay the 4k vat the car will probably end up more than what it would be actually worth, which defeats the whole purpose. So I'm actually considering trying to sell the car again in the UK if all else fails. Any opinions or advice greatly appreciated!!!

R

newmember2

Present it again with 6000km.

colm_mcm

Did you pay UK VAT?

bazz26

newmember? wrote: »

Present it again with 6000km.

Don't think that will not work as it's now flagged on the VRO system as been assessed with outstanding VRT and VAT owned on it.

Isityourself

colm_mcm wrote: »

Did you pay UK VAT?

Yes I'm a private customer so i would have paid UK VAT, i think!!

Also i would say your right Bazz26, once registered on the system as having less than 6k kilometres, it would probably have to leave the country again???

bazz26

Even selling it to someone else on UK plates down here would mean agro for the buyer with Revenue when they went to VRT it.

Isityourself

bazz26 wrote: »

Even selling it to someone else on UK plates down here would mean agro for the buyer with Revenue when they went to VRT it.

Yea i was wondering about that actually. If it was sold to someone else would they have to pay the VAT or maybe prove that they bought it on such a date??

Its looking more and more likely that the car will be going back to the UK if not because its just gonna be too bloody expensive....and more expensive than similar cars here already!!

bazz26

Yes when they go to the VRT it, it will be flagged on Revenue's system as already been assessed for VRT and liable for VAT also. Not sure how Revenue would view that even if it were a different person/owner registering it here.

newmember2

bazz26 wrote: »

Don't think that will not work as it's now flagged on the VRO system as been assessed with outstanding VRT and VAT owned on it.

Meh...I don't know about that. It's an imported vehicle that needs to be registered. This has not yet occurred and so the car has technically not been imported. The car has been brought into the country yes, but can just as easily be taken out again - and so was never imported. How can the vehicle be flagged - if he was to sell the vehicle again in the UK and a new owner put 6k kms on it and then wanted to import it into Ireland you're saying they'd try and hit the new owner with a VAT charge - because it was previously presented? I can't see how that would fly.

CiniO

Surely, once you pay VAT on it here in Ireland, you can reclaim VAT paid on it in UK.

There's no option of VAT being paid on the same product twice in two different EU countries. So there must be an option of reclaiming UK VAT back, once it's paid in Ireland.

Isityourself

newmember? wrote: »

Meh...I don't know about that. It's an imported vehicle that needs to be registered. This has not yet occurred and so the car has technically not been imported. The car has been brought into the country yes, but can just as easily be taken out again - and so was never imported. How can the vehicle be flagged - if he was to sell the vehicle again in the UK and a new owner put 6k kms on it and then wanted to import it into Ireland you're saying they'd try and hit the new owner with a VAT charge - because it was previously presented? I can't see how that would fly.

It looks like that may be my only option now newmember...i cant seem to find anyone that it has happened to before!!

R.O.R

CiniO wrote: »

Surely, once you pay VAT on it here in Ireland, you can reclaim VAT paid on it in UK.

There's no option of VAT being paid on the same product twice in two different EU countries. So there must be an option of reclaiming UK VAT back, once it's paid in Ireland.

Seems to be form VAT411 - https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/607181/VAT411_04_17.pdf

Isityourself

CiniO wrote: »

Surely, once you pay VAT on it here in Ireland, you can reclaim VAT paid on it in UK.

There's no option of VAT being paid on the same product twice in two different EU countries. So there must be an option of reclaiming UK VAT back, once it's paid in Ireland.

Sorry CiniO i forgot to reply to your earlier comment...apologies. I had a look at the receipt of payment from the garage and i actually hadn't paid vat in the UK. Suppose because it was being exported!!

bazz26

newmember? wrote: »

Meh...I don't know about that. It's an imported vehicle that needs to be registered. This has not yet occurred and so the car has technically not been imported. The car has been brought into the country yes, but can just as easily be taken out again - and so was never imported. How can the vehicle be flagged - if he was to sell the vehicle again in the UK and a new owner put 6k kms on it and then wanted to import it into Ireland you're saying they'd try and hit the new owner with a VAT charge - because it was previously presented? I can't see how that would fly.

As in the vehicle will be on the VRT system as already been assessed for VRT. I'd imagine they use this to also detect people who don't pay the VRT on the day of assessment and then let it laps outside the 30 day rule.

I don't have personal experience of the OP's situation but I'd air on the side of caution when it comes to how Revenue operate rather than assuming it will be grand.

Pkiernan

Isityourself wrote: »

It looks like that may be my only option now newmember...i cant seem to find anyone that it has happened to before!!

You can claim back the UK VAT

newmember2

Isityourself wrote: »

It looks like that may be my only option now newmember...i cant seem to find anyone that it has happened to before!!

Rather than guessing, I'd ask revenue what the situation is - I've changed my mind and will not be importing the car currently. What is the situation if I do want to import it at some point in the future. It can't be the same amount as the car will be older with more miles on it so would have to be calculated on that.

slave1

Pkiernan wrote: »

You can claim back the UK VAT

Would the vehicle sale not need to be VAT qualifying in order to do that?

CiniO

slave1 wrote: »

Would the vehicle sale not need to be VAT qualifying in order to do that?

It's against EU directive to be charging VAT twice on the same product in 2 different EU countries.

So if Ireland is considering car below 6000km as new and requires payment of VAT on it, then there must be a system to reclaim that VAT already paid on it in UK.

newmember2

CiniO wrote: »

It's against EU directive to be charging VAT twice on the same product in 2 different EU countries.

So if Ireland is considering car below 6000km as new and requires payment of VAT on it, then there must be a system to reclaim that VAT already paid on it in UK.

There is, if you paid VAT in UK you can claim it back once you have the certificate of permanent export. OP says he didn't pay VAT though.

Isityourself

newmember? wrote: »

There is, if you paid VAT in UK you can claim it back once you have the certificate of permanent export. OP says he didn't pay VAT though.

Yes according to the receipt that i have from the garage for the sale, VAT is listed as 0. I can contact them and confirm though. I'll be doing that in the morning.

CiniO

Isityourself wrote: »

Yes according to the receipt that i have from the garage for the sale, VAT is listed as 0. I can contact them and confirm though. I'll be doing that in the morning.

IMO it's impossible that they sold you a car which didn't have VAT paid on it at all.
Very likely they just didn't charge VAT on it, as it was an used car already - that's why 0 on invoice.

But I'm nearly certain, that VAT must have been initially paid on that car in UK, and after paying it again in Ireland, it can be reclaimed back from UK.

Isityourself

CiniO wrote: »

IMO it's impossible that they sold you a car which didn't have VAT paid on it at all.
Very likely they just didn't charge VAT on it, as it was an used car already - that's why 0 on invoice.

But I'm nearly certain, that VAT must have been initially paid on that car in UK, and after paying it again in Ireland, it can be reclaimed back from UK.

So your saying that a previous owner probably paid VAT?? I had my facts wrong about the car being a demo, it was actually owned by an employee of the manufacturer, on some sort of loyalty/privilege scheme. They obviously drove it very little though. So they are likely to have paid VAT on purchase.

Marcusm

CiniO wrote: »

IMO it's impossible that they sold you a car which didn't have VAT paid on it at all.
Very likely they just didn't charge VAT on it, as it was an used car already - that's why 0 on invoice.

But I'm nearly certain, that VAT must have been initially paid on that car in UK, and after paying it again in Ireland, it can be reclaimed back from UK.

VAT is a complex area for private cars; where a vehicle is, at any stage, owned by a non business owner the VAT chain is effectively broken and the dealer is selling on the “margin scheme”. This means that the dealer does not charge fullVAT on the second hand sale but rather charges on the margin (if positive). The purchaser does not receive a full VAT invoice and does not have the ability to recover VAT on an export. That notwithstanding, full Irish VAT would be payable on importation ( if the vehicle still constitutes a “new means of transport”.