UK customs, duty and VAT
Duty and then VAT on top add roughly a third to the value of a typical American import, and the way they stack catches people out. Here is what happens at the border, and how the numbers are built.
When an American car lands in the UK, it cannot go anywhere until customs have released it. That means an import declaration, the duty and VAT paid (or a relief claimed), and a separate notification to HMRC called NOVA. None of it is difficult when the paperwork is right. A small error, on the other hand, can hold a car up and have a knock-on effect on everything that follows.
That is why we do it ourselves. Our in-house customs team are authorised HMRC CDS entry agents, so the declaration is not handed to a broker at the port.
The customs entry
The import declaration tells HMRC what the vehicle is, what was paid for it and what it cost to get here. Those figures are what the duty and VAT are calculated from, which is why the purchase price and shipping costs need to be documented and accurate.
Before the car lands, we ask you for:
- Proof of what you paid: the invoice or bill of sale
- Proof that it is yours: the original US title
- A copy of your passport or driving licence
- Your Transfer of Residence reference, if you are moving here
Collecting these early means nothing is waiting on a document when the car arrives. The US export paperwork guide covers what has to happen at the American end before the car can leave.
NOVA: telling HMRC the car has arrived
NOVA stands for Notification of Vehicle Arrivals. It is HMRC's record that a vehicle has been brought into the UK and that its duty and VAT position has been dealt with. According to gov.uk, you have 14 days to tell HMRC after a vehicle comes into the UK permanently, and you may be fined if you are late.
NOVA matters for a second reason: the DVLA will not register the vehicle until it has been done. It is the step that gates everything at the UK end. We file it as part of the clearance, so it is not something you have to chase.
How duty and VAT are calculated
For a car coming from the USA there are two taxes, and the order they are applied in matters.
- Import duty is charged first, at 10% of the vehicle value.
- Import VAT is then charged at 20% on the vehicle value, plus the shipping, plus the duty.
Because the VAT is worked out on a figure that already includes the duty, you pay VAT on the duty as well. This is the point most home-made estimates miss.
A worked example
These are round numbers chosen to show the method. They are not a quote and not our rates.
| Step | Amount |
|---|---|
| Vehicle value | £30,000 |
| Shipping | £2,000 |
| Import duty at 10% of the vehicle value | £3,000 |
| Figure VAT is charged on: £30,000 + £2,000 + £3,000 | £35,000 |
| Import VAT at 20% of £35,000 | £7,000 |
| Total duty and VAT | £10,000 |
On a £30,000 car, that is a third of the purchase price, more than the "30%" people often assume. The other costs of the import, including clearance, testing, conversion work and registration, sit on top. Our costs page lists every line and runs the same method on a different figure.
The historic vehicle rate
Some older cars are treated as collectors' items rather than ordinary vehicles, and that changes the tax considerably. A qualifying historic vehicle pays no import duty, and its import VAT is charged on a reduced value that works out at an effective 5% instead of 20%.
HMRC's conditions are, broadly, that the vehicle is:
- at least 30 years old;
- in its original state, without substantial changes to the chassis, body, steering, brakes, transmission, suspension or engine;
- of a model or type that is no longer in production.
Repair and restoration are allowed, including replacing worn-out parts, as long as the car is kept in historically correct condition. A heavily modified car, such as one with a modern engine swap or a reworked chassis, can fail the test even if it is old enough.
The same example as a historic vehicle
Using the same illustrative £30,000 car and £2,000 of shipping: there is no duty, so the total is £32,000. The effective 5% VAT on that is £1,600, against £10,000 at the standard rates. Again, this shows the method, not a quote.
The historic rate is assessed vehicle by vehicle, not by age alone, and HMRC itself suggests checking the classification before purchase. If the lower rate is part of why a car makes sense, tell us before you commit and we will look at whether it is likely to qualify.
Our classic American cars page covers the rest of what is different about bringing in an older car, including the MOT route described in our IVA or MOT guide.
When there is no duty or VAT at all
Transfer of Residence
If you are moving to the UK and bringing a car you already own and use, Transfer of Residence relief can remove the duty and VAT entirely. In broad terms, you need to have lived outside the UK for at least 12 consecutive months and to have owned and used the car for at least six months before the move. The car then cannot be sold, lent or hired out for 12 months after you move.
It is a relief on a move, not on a purchase, so buying a car shortly before relocating will not qualify. You apply to HMRC before the car ships and we present the reference at customs. Our guide to moving to the UK with your car goes through the conditions and the application in detail.
Returned goods
A car that was previously registered and used in the UK, taken abroad and now coming back within the qualifying period can have duty and VAT waived, provided you can show it is returning in the same state it left. This is why our quote form asks whether the vehicle was ever UK-registered.
What happens if paperwork is missing
Customs will not release a car they cannot account for. If the declaration is missing proof of value or ownership, or a relief has been claimed without the reference to back it up, the car usually waits until the gap is filled. Meanwhile:
- The car is stuck. It cannot move on to its conversion work and test until it is released, so a missing document delays the whole import, not just customs.
- Costs can build. A car held at a port can run up storage charges while it waits.
- The value may be questioned. If the purchase price is not properly evidenced, customs can ask for more information before they accept it, and the tax is calculated on the value they accept.
- NOVA has a deadline. HMRC expect it within 14 days of arrival, and the DVLA will not register the car without it.
Most of this is avoided by sorting the documents before the car is even collected. If your car has already landed and the paperwork has stalled, we take on customs, testing and registration as standalone jobs too. See registration for what happens after clearance, or ask us for a quote with the car's details and we will price the duty and VAT along with everything else.
Quick answers
How much is import duty on a car from the USA?
Normally 10% of the vehicle value. Import VAT at 20% is then charged on the value plus shipping plus the duty. A vehicle over 30 years old in original state may qualify as a historic vehicle instead, with no duty and an effective 5% import VAT.
What is NOVA and who files it?
NOVA is the Notification of Vehicle Arrival, which tells HMRC the vehicle is in the UK and that the duty and VAT have been dealt with. It has to be done within 14 days of the vehicle arriving, and the DVLA will not register the car without it. We file it as part of the customs clearance.
When do I pay the duty and VAT?
When the car arrives, before customs release it. We tell you the amount in advance and settle it as part of the clearance so the car is not held up.
Does a 30-year-old car automatically pay the lower rate?
No. Age is one condition. The vehicle also has to be in its original state, without substantial changes to things like the engine, chassis or bodywork, and of a model no longer in production. It is assessed vehicle by vehicle.