Selling vehicles under the Personal Export Scheme

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Selling vehicles under the Personal Export Scheme
  • How to use the scheme
  • Form VAT 410
  • Export procedure
  • Selling a vehicle under the scheme
  • Delivery procedures
  • What records need to be retained by the business?
  • What happens if the customer cancels the order?
  • What happens if the customer breaches the scheme conditions?
  • Insuring the vehicle
  • Direct exports
  • Visiting other countries
  • Re-importing the vehicle

Providing certain conditions are satisfied, it is possible for motor vehicles to be purchased VAT free if they will be exported to a non-EU country. Businesses, or their advisers, should check and confirm that they can import the motor vehicle into the non-EU country and what restrictions might apply, the required paperwork and the costs involved in the importation.

De Voil Indirect Tax Service, V4.334 (subscription sensitive); HMRC Notice 707 , VATA 1994, s 30(8) and 30(10), SI 1995/2518, regs 132, 133

Please note that this scheme should not be used if the vehicle will be exported directly and not be used in the UK (including driving it to the port / airport where it will be exported) prior to being exported. The export of the car will come within the general export rules and more information can be found in the Exporting goods to non-EU countries guidance note.

However, it is very important to note that if the business selling the vehicle charges VAT at the time of sale the customer cannot obtain a VAT refund, even if the vehicle is subsequently exported to a country outside of the EU.

If the vehicle will be removed to another EU member state then this scheme cannot be used, however the scheme explained in the EU - selling a new means of transport (NMT) guidance note may be applicable.

The following types of people are eligible to use the personal export scheme:

  • an overseas visitor is a person who has been in the EU for less than either of the following periods:
    • 365 days in the last two years before the date that the person applied to use the scheme, or
    • 1095 days in the last six years before the date

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