export vat

[expert]

Hello there,

I have an enquiry about vat that I’m having trouble getting definitive answers for, customs don’t want to answer hypothetical questions, I assume for fear of incriminating themselves.

I’m English and I currently live in New Zealand and want to export a vehicle from the UK to there. Possibly many.

Does a vehicle need to be bought from a dealer or a vat registered person to be able to recover the vat?

What if I buy privately and the vat is not itemised on the receipt? Or bought from a dealer that proffer no vat on sales? I assume that vat is always present on any sale even if it’s hidden, and therefore still recoverable?

Do I pay the vat in the UK and then go about recovering the vat when I can prove the vehicle has landed in NZ, or is it done differently?

I’m aware of the personal export scheme, but i don’t want to use it, the time constraints are a problem having to own the vehicle for a certain period of time at either end to satisfy the conditions. I want to run this as a business so the time limitations would be a problem.

I’m sure you can understand the situation, have come across it before and will know how to advise.
I hope if this goes according to plan to export vehicles as a business, the vehicles there are terrible ex japan imported rubbish.

Thanks for your time.
Marty

[Marie Stein]

Hi Marty

Well HMRC never answer hypothetical questions, they simply don’t have time. They do provide a lot of information on their website and it’s really just a case of knowing where to look for the information. Here are a few pointers that should help you.

First of all, exports from any EC country to non-EC countries are generally VAT-free, or zero-rated. To obtain zero-rating, you have to purchase the goods from a VAT registered business, such as motor dealers or manufacturers. The information is in VAT notice 703: Exports, which is on the HMRC website. Section 4.13 here http://tinyurl.com/5rhn7wy explains how the rules apply to car exports. As long as the export is done through the proper procedure, then the vendor won’t have to charge VAT. You should find all the information that you need in the leaflet.

You’ll see that the notice refers to “direct export” and “indirect export” – the difference is that a direct export is exported directly by the exporter, while an indirect export is where the purchaser takes delivery of the car in the UK/EC and then makes their own arrangements for its export. The procedure to obtain zero-rating is slightly different in each case, as explained in the leaflet.

Marie
31 January 2011

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