BREXIT - The impact on importing cars?

Esel wrote: »

If VAT has already been paid in the UK, there should be no VAT on importation here, as VAT cannot be charged twice.

I wonder how this aspect will play out.

There are 3 VAT categories applicable to used vehicles.

1-Margin - this is a car owned by any entity which is not specifically entitled to claim VAT on it (e.g a lease company or car rental company) - currently a margin car imported from the UK is not liable to Irish VAT (I’ll come back to this)

2-Qualifying - this is a car first and only owned by any entity entitled to claim VAT on it (e.g a lease company or car rental company) - currently a qualifying car imported from the UK by a VAT registered entity for resale will be liable for Irish VAT as the Irish entity should reclaim the UK VAT. Post Brexit these vehicles should be invoiced excluding VAT for permanent export. Private individuals will not get the benefit of this as a zero VAT invoice cannot be issued to a private individuals. The car will become Margin before import of bought by an individual.

3-Commercial (See Qualifying and apply to commercial vehicles without the limitations) A commercial vehicle becomes Margin at the point it is sold to a non-VAT registered entity, otherwise it may change hands as often and to as many and varied VAT registered entities and remain Commercial for its entire life. Post Brexit these vehicles should be invoiced excluding VAT for permanent export.

Now, back to margin cars post Brexit; these cars have UK VAT locked in and were not previously liable to Irish VAT as VAT was paid in an EU member state. When the UK ceases to be an EU member state these cars (and any vehicle sold to a non-VAT entity) will be liable to Irish as well as UK VAT.

I have had clarification from Revenue that the 10% tariff will first be applied to the UK invoice and that 23% VAT will then apply to the total of the invoice and the tariff.

I’m sure that’s a clear as mud to most people, but it was cathartic to write it.

adunis wrote: »

Here's what I hope will happen
England f@#*s of leaving a border down the Irish sea.
N.I. stays in the customs Union and a fudge says they are still in the UK as well.
Mr enterprising NI resident brings in a model3 for free cos he's an "englishman" and then sells it to me as an EU resident and I pay the exact same thing I do now importing my car from another EU jurisdiction.
Another scenario won't be even remotely economically viable

The English car (let's assume something UK manufactured rather than a Tesla - if it is a Tesla it will have been imported from Netherlands to UK and there may already have been import costs there) will have likely gotten even cheaper as they plan to decimate worker's rights and environmental standards. Any warranty would most probably be invalid, and it may also not be up to the European safety standards with regard to crash testing etc.

I think the need to avoid that situation (yes it's potentially good for you as a buyer but it's bad for the industry, and more importantly it's bad for every other industry where the same thing will happen) is why the talks have been going nowhere for so long.

Apologies if this drifted off topic a little, but it explains why I can't see a deal being agreed where the above situation will be the outcome for importing cars.

ninty9er wrote: »

There are 3 VAT categories applicable to used vehicles.

1-Margin - this is a car owned by any entity which is not specifically entitled to claim VAT on it (e.g a lease company or car rental company) - currently a margin car imported from the UK is not liable to Irish VAT (I’ll come back to this)

2-Qualifying - this is a car first and only owned by any entity entitled to claim VAT on it (e.g a lease company or car rental company) - currently a qualifying car imported from the UK by a VAT registered entity for resale will be liable for Irish VAT as the Irish entity should reclaim the UK VAT. Post Brexit these vehicles should be invoiced excluding VAT for permanent export. Private individuals will not get the benefit of this as a zero VAT invoice cannot be issued to a private individuals. The car will become Margin before import of bought by an individual.

3-Commercial (See Qualifying and apply to commercial vehicles without the limitations) A commercial vehicle becomes Margin at the point it is sold to a non-VAT registered entity, otherwise it may change hands as often and to as many and varied VAT registered entities and remain Commercial for its entire life. Post Brexit these vehicles should be invoiced excluding VAT for permanent export.

Now, back to margin cars post Brexit; these cars have UK VAT locked in and were not previously liable to Irish VAT as VAT was paid in an EU member state. When the UK ceases to be an EU member state these cars (and any vehicle sold to a non-VAT entity) will be liable to Irish as well as UK VAT.

I have had clarification from Revenue that the 10% tariff will first be applied to the UK invoice and that 23% VAT will then apply to the total of the invoice and the tariff.

I’m sure that’s a clear as mud to most people, but it was cathartic to write it.

Haven't seen you in an age! Welcome back

Greengekko wrote: »

Will new VAT charges come into effect exactly the 1st of November? Or is this likely to come in a few months into the new year?

I think I've left buying a car a little late haha!

If there is a deal, there would be a transition period to negotiate further relationship. Big Britain would be officially out of eu, but technically still in.

quokula wrote: »

The English car (let's assume something UK manufactured rather than a Tesla - if it is a Tesla it will have been imported from Netherlands to UK and there may already have been import costs there) will have likely gotten even cheaper as they plan to decimate worker's rights and environmental standards. Any warranty would most probably be invalid, and it may also not be up to the European safety standards with regard to crash testing etc.

I think the need to avoid that situation (yes it's potentially good for you as a buyer but it's bad for the industry, and more importantly it's bad for every other industry where the same thing will happen) is why the talks have been going nowhere for so long.

Apologies if this drifted off topic a little, but it explains why I can't see a deal being agreed where the above situation will be the outcome for importing cars.

They're not going to come up with unique UK standards for cars and crash testing for the simple reason that the majority of UK production is for export. They're not going to have a line in the factory specifically with a UK-only spec: they'll make one spec to the most applicable - in other words, export-spec.

galwaytt wrote: »

They're not going to come up with unique UK standards for cars and crash testing for the simple reason that the majority of UK production is for export. They're not going to have a line in the factory specifically with a UK-only spec: they'll make one spec to the most applicable - in other words, export-spec.

No, but the safety equipment, such as airbags, active braking systems etc, that would be required in EU market, might not be in UK-only cars.

grogi wrote: »

No, but the safety equipment, such as airbags, active braking systems etc, that would be required in EU market, might not be in UK-only cars.

To be honest that is not such a big deal as these items are already manufactured with such specification that they will pass eu certification standards easily.

Sexual Chocolate wrote: »

Suppose it's fair to say that we know no more about things after today's comedy show in Westminister. Can't even say if we have another 3 months to bring anything in or not.

Johnson is playing hard to get again, but everyone else is tired of this nonsense. At this state UK is not capable of having a deal. So unless there are elections there will be no extension granted by EU.

Dia_Anseo wrote: »

The rush after the 31st will not be BREXIT but will be on the NoX tax on imported cars after 1st Jan 2020.

For instance a 2015 Ford Focus that is one of the most popular imported cars will get taxed 2700 euro for Nox tax alone on top of VRT of about 1800 euro.


That 2700 euro increase is a lot more than any VAT and excise duty.


Why is nobody kicking up a fuss about this??

Can you give a link to info how to see how the Figure of 2700 is calculated please.