You found the car in Germany or the Netherlands, it is registered there, and you have been told that cars from the EU pay no duty since the trade deal. Then someone mentions 10% on top. It is an unwelcome surprise, but the rule behind it is simple, and once you know it you can tell in advance which way your car will go.
Duty on a car from the EU turns on one question: where the car was built. Not where you bought it, and not where it has been driven since.
- EU or UK-built
- 20% VAT, no duty
- Built elsewhere
- 10% duty plus 20% VAT
- Decided by
- Where the car was made
- Over 30 years old
- 5% VAT, no duty
Where it was built, not where you bought it
GOV.UK defines the origin of goods as where they were grown, produced or manufactured. It adds that this may not be the country the goods are shipped from or bought in. That applies to a car exactly as it applies to anything else.
So a car sold new in France, registered in France and driven there for years still has the origin of the factory that made it. If that factory was in Japan, the USA or China, the car is a Japanese, American or Chinese car as far as customs is concerned.
What the UK-EU deal actually covers
The Trade and Cooperation Agreement between the UK and the EU removes duty on goods that originate in the UK or the EU and meet the agreement's rules. The UK tariff shows it plainly: a used petrol car carries a standard 10% duty, and a 0% preferential rate for goods of EU origin.
The zero rate belongs to the goods, not to the route. A car built outside the UK and EU does not become European by being sold or registered there, so it pays the standard 10%. VAT at 20% is then charged on top, because GOV.UK says VAT is worked out on the cost of the car, the delivery and the duty together.
What the difference looks like
Take two cars bought in the EU, each costing £20,000 once the price and the transport to the UK are added together. One was built in Germany, the other in Japan. Everything else is the same.
| Feature | Built in the EU | Built outside the EU |
|---|---|---|
| Price plus transport | £20,000 | £20,000 |
| Duty | £0 | £2,000 (10%) |
| VAT | £4,000 (20% of £20,000) | £4,400 (20% of £22,000) |
| Total import tax | £4,000 | £6,400 |
That £2,400 gap is why it is worth knowing the answer before you agree a price. Our import tax calculator runs the sum for your figures, and six worked examples show other cases line by line.
The cars that catch people out
The badge does not settle it. Japanese, American, Korean and Chinese brands are sold new all over Europe, and the car in front of you may have been built in Europe or shipped in from elsewhere. Neither does a European number plate or a European registration document, which only show where the car has lived.
The ones we look at most carefully are cars from non-European brands, and anything imported into the EU before it was sold to you. If the seller cannot tell you where it was made, that is the first thing to find out.
Ask before you buy. Send us the details while you are still talking to the seller. Knowing where the car was built changes the tax, and it is far easier to ask for evidence before the money has gone.
Proving origin under the agreement
Being built in the EU is not quite enough on its own. To get the zero rate, the importer claims it, and GOV.UK says the claim rests on one of two kinds of proof.
- A statement on origin: set wording, made out by the exporter, added to the invoice or another document that identifies the goods. The exporter must be located in the EU and must hold information showing the goods are originating.
- Importer's knowledge: the importer claims on the strength of their own knowledge that the goods meet the rules. The exporter or producer may need to supply information about how the goods were made.
A statement on origin for an import into the UK stays valid for 2 years from the date it was made out. The importer has to keep it for 4 years from the date of import, in case HMRC asks.
The claim is normally made on the customs declaration itself. GOV.UK also allows a claim after import, within 3 years, with valid proof of origin, and any duty paid is then repaid. In the UK that repayment claim is made on form C285.
What that means for a private buyer
A business selling a car abroad is used to paperwork, and may be able to make out a statement on origin if it holds the information behind it. A private seller is less likely to have that information to hand, which is why the evidence question is best raised early.
We are HMRC CDS authorised agents with in-house customs staff, so the person who makes your entry is the person who looks at the origin question. We check whether the car was built in the EU or UK, tell you what evidence we need for your car, and claim the preference on the declaration where it applies. Our guide to customs clearance for imported cars covers the rest of the entry.
For a car bought in the EU
0 of 6 done
The Certificate of Conformity is on the list for a different reason: most EU cars under 10 years old need one to be registered. Our guide to the Certificate of Conformity explains why.
Other trade agreements
The UK has trade agreements with other countries too. GOV.UK notes that each one sets its own rules for how goods must be made to count as originating, and that preferential and non-preferential rules can both apply. Whether any of them helps depends on the car, where it has been and the evidence behind it.
That is a question for your particular car rather than a general rule, so ask us. If an agreement can cut the duty and the origin can be proven, we will check it for you.
When origin stops mattering
Two situations make the origin question irrelevant:
- Cars over 30 years old: 5% import VAT and no duty, wherever they were built. HMRC has conditions for this, covered in our guide to the 5% VAT rate on historic cars.
- Moving to the UK: with HMRC's Transfer of Residence approval in place before the car arrives, no VAT or duty is due.
For everything else bought in Europe, see importing a car from Europe to the UK for the full process, from collection to registration.
Questions people ask
Do I pay duty on a car bought in the EU?
Not if it was built in the EU or the UK and the origin can be shown. A car bought in the EU but built elsewhere, such as Japan, the USA or China, pays 10% duty as well as 20% VAT.
Why does it matter where the car was built?
GOV.UK defines origin as where goods were produced or manufactured, which may not be where they were bought. The UK-EU agreement only removes duty on goods that originate in the UK or EU.
How is EU origin proved?
Under the UK-EU agreement, by a statement on origin made out by an EU-based exporter, or by the importer's own knowledge that the goods meet the rules. The claim is normally made on the customs declaration.
Can I claim the duty back later?
GOV.UK allows a claim within 3 years of import if you have valid proof of origin, and any duty paid is repaid. In the UK the claim is made on form C285.
Does a classic car from the EU pay duty?
A car over 30 years old pays 5% import VAT and no duty, wherever it was built, provided it meets HMRC's conditions for a historic vehicle.
Not sure where your car was built? Tell us about it on the quote form and we will work out the tax before you commit.
