Brexit related tax query

Isambard

what do you suppose the position would be if you imported a car that was previously Irish registered. Presumably they couldn't charge VAT on it again. Or maybe they could! What do you think?

Del2005

If the VAT was reclaimed they could.

Isambard

can you do that?

CiniO

Isambard wrote: »

can you do that?

If car was bought new in Ireland, and exported to UK before it has travelled 6000km or before it's 6 months old, then it would be considered new in UK, and therefore VAT was due to be paid there.
And once VAT was paid there, considering it would be against EU laws to charge VAT twice in 2 EU countries, Irish VAT could be reclaimed.

At least that's the scenario I imagine could be a reason for reclaimed VAT.

Miscreant

For the infinitesimally small number of vehicles being imported from the UK after Brexit that this scenario would apply to, you would need to talk to the VRT section in Revenue. I wouldn't go assuming anything about VAT having been paid in an EU country in this case.
Revenue are a law unto themselves so the answer could be anything.

Isambard

Del2005 wrote: »

If the VAT was reclaimed they could.

and if it wasn't? I know no one really knows, just curious.

Marcusm

CiniO wrote: »

If car was bought new in Ireland, and exported to UK before it has travelled 6000km or before it's 6 months old, then it would be considered new in UK, and therefore VAT was due to be paid there.
And once VAT was paid there, considering it would be against EU laws to charge VAT twice in 2 EU countries, Irish VAT could be reclaimed.

At least that's the scenario I imagine could be a reason for reclaimed VAT.

I’d love you to show me the law where it says VAT can’t be charged twice. VAT derives from EU directives which are transposed into national law with frequent but minor discrepancies between them. Irrespective, unlike say with VRT, a good does not have a VAT history which follows it around. The VAT status is determined by the transaction. An importation of a good from a third country (GB post 31.12.20 but not NI) will deal with normal VAT rules irrespective of whether the good had previously been bought/sold in Ireland with/without VAT. VAT as a tax could not be managed if there had to be a record of every transaction in the individual item.

CiniO

Marcusm wrote: »

I’d love you to show me the law where it says VAT can’t be charged twice. VAT derives from EU directives which are transposed into national law with frequent but minor discrepancies between them. Irrespective, unlike say with VRT, a good does not have a VAT history which follows it around. The VAT status is determined by the transaction. An importation of a good from a third country (GB post 31.12.20 but not NI) will deal with normal VAT rules irrespective of whether the good had previously been bought/sold in Ireland with/without VAT. VAT as a tax could not be managed if there had to be a record of every transaction in the individual item.

I spent some time looking through appropriate EU directive, but no results so far.

Only thing which I found is this: (however it's not the law, only EU website).

I live in France. I bought a new car from a dealer in Belgium and paid VAT on it. Now I have been asked to pay it again as I am registering the car in France. Surely that is wrong?
YES / NO — You cannot be made to pay VAT in more than one country, and VAT on cars is payable in the country where they are to be registered, i.e. France (not in the country where they are bought — the rule for most other goods).

You could have told the dealer that the car was intended for registration in France, and avoided paying Belgian VAT.

Since you already have paid Belgian VAT, you should now apply for a VAT refund from the Belgian tax authorities, based on evidence from the French authorities that you have registered your car in France within 6 months of it first being put on the road and before it has clocked up 6,000 kilometres.

https://europa.eu/youreurope/citizens/vehicles/cars/vat-buying-selling-cars/faq/index_en.htm


This encourages me to think though, that such law exists.
I'll keep looking when I'll find some time.

Marcusm

CiniO wrote: »

I spent some time looking through appropriate EU directive, but no results so far.

Only thing which I found is this: (however it's not the law, only EU website).


https://europa.eu/youreurope/citizens/vehicles/cars/vat-buying-selling-cars/faq/index_en.htm


This encourages me to think though, that such law exists.
I'll keep looking when I'll find some time.

That’s dealing with a New means of transport which has a specific treatment but I will caution you that there are circumstances on which a consumer can buy such a vehicle in one member state and pay VAT which is not recoverable and still be required to pay VAT when imported into the home country. The corollorary of this is the occasional post here of someone who has acquired an NMT from the U.K. having recovered the U.K. VAT and then put up enough mileage on it before it arrives in Ireland such that it is no longer an NMT and no Irish VAT will be charged.

Keep looking if you want but there is no general ability for a consumer to recover VAT in another member state nor to reimport a previously exported car and not pay VAT. As I mentioned there is no longstanding VAT history (unlike say the position re VRT where reimported cars do not attract additional VRT unless the prior VRT was debated on export).

Marcusm

Marcusm wrote: »

I’d love you to show me the law where it says VAT can’t be charged twice. VAT derives from EU directives which are transposed into national law with frequent but minor discrepancies between them. Irrespective, unlike say with VRT, a good does not have a VAT history which follows it around. The VAT status is determined by the transaction. An importation of a good from a third country (GB post 31.12.20 but not NI) will deal with normal VAT rules irrespective of whether the good had previously been bought/sold in Ireland with/without VAT. VAT as a tax could not be managed if there had to be a record of every transaction in the individual item.

So importing a car from NI in 2021 will not incur VAT. Will it incur an import charge?

Isambard

another thought strikes me. VAT and Excise Duty are supposed to be sorted at Port of Entry. Wil there be a penalty for late payment of it by all those cars in the Country and not yet declared?

commited

Isambard wrote: »

another thought strikes me. VAT and Excise Duty are supposed to be sorted at Port of Entry. Wil there be a penalty for late payment of it by all those cars in the Country and not yet declared?

From the revenue video - If a car is already in the country, it isn't subject to VAT/Duty as long as you can prove it was in the state prior to end of this year

Del2005

commited wrote: »

From the revenue video - If a car is already in the country, it isn't subject to VAT/Duty as long as you can prove it was in the state prior to end of this year

Would the VRT penalty be much different to the VAT/ duty due?

Are we removing the UK 20% rate from the cost of the car and adding the irish 21%. So it might even itself out.

Del2005

[Deleted User] wrote: »

Are we removing the UK 20% rate from the cost of the car and adding the irish 21%. So it might even itself out.

That's assuming the UK will give a VAT refund when you export a 2nd hand vehicle.

lomb

Theres no reason to vat a second hand good why are the EU/ British not on sorting this out?

Isambard

lomb wrote: »

Theres no reason to vat a second hand good why are the EU/ British not on sorting this out?

i think they are ....have been for months...not getting far....

Del2005

lomb wrote: »

Theres no reason to vat a second hand good why are the EU/ British not on sorting this out?

There's VAT on 2nd hand goods imported from every other non EU country, why should the UK be treated differently?

Buddy Bubs

How important is the irish car buying public (and irish dealers buying) to uk sellers?
Someone told me the other day they are worried because 25% of uk used cars are bought from Ireland. Get away to f**k i said to him there's no way its that high. Anyone have any idea?

Isambard

Buddy Bubs wrote: »

How important is the irish car buying public (and irish dealers buying) to uk sellers?
Someone told me the other day they are worried because 25% of uk used cars are bought from Ireland. Get away to f**k i said to him there's no way its that high. Anyone have any idea?

they possibly mean NI. The English often don't know there's a difference

User1998

8 million used car sales in the UK in 2019. I don’t think 100,000 going to Ireland will make much of a difference. I think BCA will feel it tho.

Rrrrrr2

The more I think about this the bigger impact it’ll have- especially the nice, higher spec more prestige makes you see (two a penny) - the majority are used U.K. imports.
It’s either going to be a boost for franchised dealers or a huge kick to used buyers or both. Frustrating situation

Buddy Bubs

User1998 wrote: »

8 million used car sales in the UK in 2019. I don’t think 100,000 going to Ireland will make much of a difference. I think BCA will feel it tho.

Ok, so its 1 in 80 cars we buy not in 1 in 4 as was suggested to me. I would have guessed something like 1 in 50.