Import Tax. How much!?

There are two certainties in life. Death and taxes.

Now, if you compare the prices for DeLoreans in the States to what the cars go for here in the UK it seems obvious that its a much better bet to import. But before you go off and put in a winning bid there's the question of Tax to think about.

First look at the other costs involved in shipping the car back in my other posts. To get #10719 back to the UK I'm having to pay in the region of £1500 for transport, shipping and insurance. Then you have to look at the whole Tax issue.

Normally if you import a modern car to the UK you have to pay 10% import tax and a further 20% VAT on top of that. Ouch! That's a whole 30% on top of the purchase price, or £3,333 on a car purchased for £10K. But there are ways of reducing this.

The first is the 10% import tax. As the DeLorean was originally manufactured within the EU (Northern Ireland) it is exempt from this tax. You just need to make this very clear when putting the car through HMRC customs.

The second part, the 20% VAT, is a little trickier. Up until recently there was no getting out of it. You had to pay the full whack. However, now that the cars are (mostly) over thirty years old you can apply for this VAT to be reduced to 5% due to the car being " of historical importance". But be warned, applying for this "binding tariff" order as its called or BTI isn't straight forward. I spent over an hour on the phone to HMRC just trying to find out how to apply! You can fill out the forms yourself, but for me getting the shipping agent (who has the experience, not to mention the contacts in HMRC) to do it was well worth the £50 cost.

This "binding tariff" or BTI basically means that you apply to HMRC to make a judgement about the level of tax you will have to pay BEFORE you bring the car into the country. They then have to stick to that judgement. However, these rulings can't be applied for if the car has already been shipped, so as soon as you have agreed to purchase a car you need to start the process.

Even then when the car lands in this country the chances are that HMRC won't have made a decision yet (it takes them up to eight weeks for each application). So, acording to my agent anyway, HMRC will allow you to pay the 5% VAT, but will retain the title and bill of sale for the car until the final ruling is made. Yes, you heard right. Until they make the decision they keep the documents for the car, which means until they are happy you have paid in full you can't register the car.

Well, my ETA  for the car turning up in this country is the 25th of November, so I'll find out then what the process is, not to mention if I have a larger bill to pay in tax or not.....