Import tax is the part of the bill people find hardest to picture. The rates are simple enough. It's working out what they mean for a real car, with real shipping on top, that catches people out. So here are six cars, worked through line by line.
- Non-EU car
- 10% duty + 20% VAT
- EU-built car from the EU
- 20% VAT
- Over 30 years old
- 5% VAT, no duty
- Moving to the UK
- Nil, with approval
How the sum works
Tax is worked out on the price you paid plus the cost of getting the car here. Duty comes first, at 10% for a car from outside the EU. VAT then goes on top of the price, the shipping and the duty, which is why the VAT figure is a little bigger than you'd get by taking 20% of the price alone.
The shipping figures below are our guide "from" prices, for shipping only: £1,450 from the USA, £1,725 from Malta and £3,575 from Japan. Your quote prices your actual route. The tax follows from whatever that comes to.
Six cars, worked through
| Feature | Car price | Shipping | Duty | VAT | Tax to pay |
|---|---|---|---|---|---|
| £8,000 car from the USA | £8,000 | £1,450 | £945 | £2,079 | £3,024 |
| £30,000 car from the USA | £30,000 | £1,450 | £3,145 | £6,919 | £10,064 |
| £15,000 car from Japan | £15,000 | £3,575 | £1,858 | £4,087 | £5,945 |
| £12,000 EU-built car from Malta | £12,000 | £1,725 | £0 | £2,745 | £2,745 |
| £25,000 car over 30 years old, from Japan | £25,000 | £3,575 | £0 | £1,429 | £1,429 |
| £30,000 car, Transfer of Residence | £30,000 | £3,575 | £0 | £0 | £0 |
What each one tells you
The £8,000 American car ends up costing £12,474 once shipping and tax are in. The £30,000 one comes to £41,514. On the cheaper car, tax is about two thirds of the shipping-and-tax bill. On the dearer one it's close to nine tenths, because tax rises with the price while shipping barely moves. That's worth remembering when you compare cars from different countries: the dearer the car, the more the tax matters and the less the shipping does.
The Maltese car shows what the EU rules do. An EU-built car bought in the EU pays VAT only, so a £12,000 car there carries less tax than a £15,000 car from Japan. Check where the car was built, though. A Japanese-built car sold new in Malta would pay the 10% duty as well.
The classic is the surprise. A £25,000 car over 30 years old pays £1,429 in tax, against £5,945 for a £15,000 modern car from the same country. If the car you're after is close to the 30-year mark, the date on the V5 or the build plate is worth checking before you buy. Our JDM guide and classic car guide both cover it.
The last row is Transfer of Residence. If you're moving here after at least 12 months abroad, and you've owned the car for at least 6, there's no tax at all, so the only cost left is the shipping. It needs approval from HMRC first, which our Transfer of Residence guide walks through.
What isn't in these figures
Shipping only, plus tax. The costs that come after sit outside them: any conversions the car needs, an IVA or MOT, DVLA registration and delivery. Those depend on the car, and they're on your quote as separate lines so you can see where each pound goes.
These are estimates for guidance. HMRC works out the real figure from the customs value, and we make the declaration as HMRC CDS authorised agents, so we'll confirm the exact amount before the car lands.
Questions people ask
Is VAT charged on the shipping as well as the car?
Yes. Import tax is worked out on the price of the car plus the cost of getting it to the UK, so shipping is part of the amount VAT is charged on.
Why is VAT more than 20% of the car price?
Because VAT is charged on the car, the shipping and the duty together, not on the car price alone.
Do I pay duty on a car from the EU?
Not if it was built in the EU or the UK. A car built elsewhere and bought in the EU pays 10% duty as well as VAT.
Can I get the tax down?
Not by much if the car is a standard import, but a car over 30 years old pays the reduced rate, and Transfer of Residence removes tax altogether if you qualify.
Where can I get a figure for my own car?
Our import tax calculator gives you an estimate in a few seconds, and a quote gives you the full cost for your route.
Try your own numbers in the import tax calculator, or ask for a quote and we'll price the whole job.
