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Author Topic: Import Duty & VAT  (Read 537 times)
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williamcorke
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« on: 29 July, 2021, 05:11:28 PM »

I'm hoping someone here might be able to shed some light on this subject.

I have a stripped shell of a car that I need to find a skilled metal worker to repair (all panels will have to be fabricated) and have had someone recommended to me who has recently gone back to his native Hungary and is offering a pick up, drop back finished service to the UK. Skilled labour is a LOT cheaper in Hungary... He can get it painted there, too.

So, my question is, what charges might be levied when my car is returned in a better state than when it left? Clearly there's no change in ownership involved, just transit over (many) borders.

Someone I spoke to suggested that there might be tax on the value of the improvement, but I've not managed to find any good advice on this topic online.
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neil-yaj396
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« Reply #1 on: 30 July, 2021, 07:29:17 AM »

William

My Customs experience is pre single market, but back then your car would have been exported, then when it returned, it would have a new valuation for customs purposes to reflect the work done. No customs duty from Hungary (despite what some might say otherwise) but you would be liable to pay VAT on the new valuation.

This is a complex procedure called Outward Processing Relief. My advice would be to put all this in the hands of a Shipping Agent.

Another little gift care of Brexit.
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Scott
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« Reply #2 on: 30 July, 2021, 11:42:17 AM »

Hi William

I think you situation would be covered by: https://www.gov.uk/guidance/using-outward-processing-to-process-or-repair-your-goods

This says: "VAT is charged on the repair costs, plus outward and inward freight charges, plus duty, but excluding insurance charges."

In this case no VAT should be charged at source ... but clearly you'd have to check that your Hungarian company is fine with that.

I haven't found anything on getting charged on any 'value of improvement' which would seem somewhat subjective for a lot of cases anyway.

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williamcorke
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« Reply #3 on: 30 July, 2021, 11:58:11 AM »

Thank you both, that's really helpful.

Some of the info i found online suggests that VAT on 'Historic Vehicles' is charged at 5% rather than 10%, but the cut-off for this might be 1950, which wouldn't help me.
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Jai Sharma
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« Reply #4 on: 30 July, 2021, 12:04:41 PM »

I think the cut off for 5% VAT on vehicles is 30 years old but obviously you will need to check.
Whether that is relevant in the case where it is really the work rather than the vehicle is a separate question which I don't know the answer to.
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