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Classic cars are set to come with a hefty 20 percent VAT charge alongside an additional 10 percent import duty. He adds now is a great time to snap up a European bargain with pieces currently lower than they will be in just over four weeks time.
However, Colin Laidlaw, Director of VAT at Kreston Reeves has warned historic models are set to become “even more expensive” in the coming weeks.
However, he added the new charges would simply be putting costs into line with the rest of the world.
Mr Laidlaw said: “The cost of buying and importing a classic car or motorcycle from continental Europe is set to become even more expensive.
“The bargain classic for sale in Europe may come with a new 20 percent VAT and 10 percent duty charge.
“[This is] mirroring the cost of buying and importing classic vehicles from the rest of the world.”
Under current rules VAT between EU countries are currently waived but this will change on 31 December if no deal is reached.
Experts at Trade Classics have also warned supply chains could be affected leading to longer waiting times.
They warn drivers may need to have a think about delay times and extra paperwork they may need when purchasing a model.
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However, Mr Laidlaw has warned some classic models may be exempt from the added tax charges if they are of “historical interest”.
This may be possible if experts believe the model is rare and could be included in a historic motoring collection.
Models which tend to pass the threshold include cars which were built before 1990 and are no longer being built.
Cars of significance or those who have achieved some level of sporting success may also be exempt from the added costs.
Mr Laidlaw added: “Vehicles that HMRC consider to be of historical interest may qualify for a reduced rate of VAT of just five percent and a nil-rate duty but comes with tough criteria to meet.
“A vehicle must be over 30 years old, be in its original state, no longer in production, and, importantly, have what HMRC calls the ‘requisite characteristics for inclusion in a collection’.
“HMRC defines this as meaning being relatively rare and used outside of its normal purpose.
“Vehicles that are involved in motor racing, built for competition and having achieved sporting success also qualify.”
He added: “This exemption has been tested in courts and it is unlikely that an everyday classic bought and imported into the UK from Europe or elsewhere would qualify.”
The added tax will only be applied on classic models which have been imported to the UK from abroad and not those already on UK land.
Tom Preston, used car expert at Hippo Motor Finance has previously warned that Brexit may not impact used car prices as all of the models are paid for stock.
This could see collectors favouring British based models and manufacturers in a desperate attempt to save costs.
Mr Preston said: “Brexit won’t impact used car prices. They should remain stable whatever the Brexit outcome is, due to the fact that used cars are all paid-for stock.
“The vehicles have already been on UK roads, they don’t need to be imported from the EU, and there’s no need for additional costs like for components, which are manufactured overseas.”
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