Used Car Import Tariffs

Overview

Since January 1, importing a used car from Britain has become much more complicated and also expensive to boot. Traditionally, many Irish car buyers could have saved as much as €10,000 when shopping for a car in the UK.

By shopping around in the UK for a car, you could get a great bargain on a higher-spec vehicle with lots of extras, such as sat nav, better trim, heated seats etc. compared to what you can get here for a much higher price.

Prior to January 1, if you imported a vehicle from Britain, you did not have to pay Vat unless the car was less than six months old, or there was less than 6,000km on the clock, but this has all changed. There were also no customs import duty tariffs payable once it was brought in.

The rate of tariff or customs duty which is now applied to the majority of cars imported into Ireland (IE) from Great Britain (GB) depends on the commodity or classification code of the vehicle. In general terms, the tariff on a vehicle from a third country is 10%.

Even when paying the vehicle registration tax (VRT) after bringing it in, the savings before January 1 were still in the thousands for most motorists.

The EU-UK Trade Agreement allows for what is termed as a preferential tariff rate of 0% customs duty for goods and cars being imported from Great Britain to Ireland, where those cars were manufactured in Britain and are classed as having a UK origin. If a vehicle’s origin is not the UK, then you cannot claim a 0% customs duty preferential rate.

Revenue has stated that importation of vehicles from Great Britain are now treated as being imported from a third country or outside of the EU. That means you must now complete a customs declaration, account for customs duty if applicable, and have paid Vat prior to presenting the vehicle for registration.

You can re-import goods into the European Union (EU) without payment of Customs Duty and Value-Added Tax (VAT). This is called Returned Goods Relief. These goods:

must have been originally exported from the EU
can include parts or accessories belonging to other products previously exported.
The relief from VAT is only allowed if the person that re-imports the goods is the same person who originally exported them.
You must re-import the goods within three years from the date of export.

Returned Goods Relief

It may be possible to claim RGR (Returned Goods Relief) from Customs Duty if you import a vehicle from Great Britain (GB) into Ireland and where those cars were previously imported into GB from another EU country.

Cars that are exported from an EU country to GB may qualify for a RGR claim from customs duty when they are re-imported into the EU (IE), even if the European Union country they are re-imported into is not the same as the one they left the EU from.

One of the conditions for claiming RGR is that the vehicle must be re-imported into the EU (IE) within three years of the date that it was exported from the original EU State. In this instance, the date of export is relevant and not the date of registration.

Relief from VAT

In order to claim relief from the import VAT, the vehicle must be re-imported by the same operator that originally exported the vehicle from the original EU State.

Revenue warning

Revenue has warned potential UK used car buyers that the relatively simple and straightforward process that was in place before January 1, 2021 is now far more complicated.

Previously, when someone bought a car in from the UK, they received a form from the UK dealer that the vehicle was being exported out of the United Kingdom and then the Irish buyer could simply process this through the VRT office, once the vehicle had landed here in Ireland.

Now, since Brexit with the UK leaving the European Union, things have not only become more complex but also, potentially, much more expensive. Revenue has stated:

"Very significant changes take effect if you import a used car into the State from the UK, in that possible increased costs due to customs duty and Vat may arise,"

"If you are an individual or a business and you import vehicles from Britain, you are required to complete a customs declaration; pay or account for customs duty of 10% if applicable; and pay Vat at 23% prior to presenting the vehicle for registration. As is the case at present, VRT is also payable on such vehicles,"

Importing a vehicle from Great Britain (England, Scotland & Wales)

From 1 January 2021 vehicles imported from Great Britain are liable to:

customs duty, if applicable
Vehicle Registration Tax (VRT)
VAT at the current standard rate.

Importing a vehicle from Northern Ireland

Vehicles first registered in Great Britain and imported into Northern Ireland after 31 December 2020 are liable to:

customs duty, if applicable
Vehicle Registration Tax (VRT)
VAT at import if they are subsequently imported into the State. (This VAT liability can be discharged by completing the Supplementary import declaration form.)

For all importations from both Great Britain and Northern Ireland an electronic customs declaration will be required in advance of the vehicle arriving in the State.

Importation scenario: An EU manufactured vehicle is transported to the UK and registered BEFORE 1 January, 2021 from any other EU member state, e.g. Germany or France and then returned to an EU member state e.g. Ireland AFTER 1 January, 2021.

Under Brexit, the United Kingdom was under the transition process for a period of 3 years.

In order for a vehicle to be eligible for the RGR (Returned Goods Relief):

The vehicle must have been moved from the EU to the UK before the end of the transition period.
The vehicle must also be imported back into the EU (IE) within three years of the original movement to the UK.
Under the provisions of the Returned Goods Relief, the vehicle must not have been altered in any way within that same three-year timeframe.
The importer must submit a customs import declaration for the vehicle for entry into an EU member state e.g. Ireland.
Use the appropriate import declaration codes to claim returned goods relief.
The date of the permanent movement of the vehicle from the EU to the UK will be earlier than the date of registration of the vehicle in the UK.
The importer to Ireland must provide documentary proof to show that the vehicle was moved permanently to the UK prior to 31/12/2020 e.g. the trader documents related to the shipping/transport of the vehicle.
The importer must provide proof the vehicle was manufactured in the EU within three years of the date of its reimportation into Ireland. Revenue can accept, amongst other official proof documentation, a MyVehicle.ie or VMS Vehicle History Check Report. Conditions for claiming returned goods relief are as follows:
1. the date the vehicle was manufactured
2. the details of where the vehicle was manufactured (must be within EU)
3. the chassis number of the vehicle and
4. the description/technical details of the vehicle
5. Vehicle Identification Number
6. Certificate of Conformity or an Oasis Vehicle Enquiry Report.
7. Confirmation from the seller in the UK that the vehicle has not been altered

Where requested, the documentary proof should be presented to Customs at importation. It should also be noted that the VIN can only be used as proof where the 4th - 9th characters of the alphanumeric Vehicle Identification number provide the codes for the description of the vehicle. The 10th character on the VIN identifying the year the car was manufactured and the 11th character identifying the factory of manufacture. When showing the VIN, the importer should be in a position to make the manufacturers’ codes available to Revenue.

Author

Justin Kavanagh
Justin Kavanagh is a recognised leader in automotive intelligence and vehicle data supply to the entire motor industry. He has almost 20 years experience in building systems from the ground up. As the Managing Director of Vehicle Management System, he understands the need and importance of trustworthy and reliable vehicle history and advice to both the trade and the public.
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Importing cars has become far more complicated and expensive