Car Import Duty and VAT in the UK: How Much Will You Pay?

Importing a car to the UK involves more than just the purchase price and shipping. Import duty and VAT can add a significant amount to the total cost, and understanding how these charges work is essential for budgeting accurately.

Import Duty Rates

Duty is calculated on the customs value of the vehicle, which includes the purchase price and any costs incurred before the vehicle arrives in the UK (e.g., inland transport in the country of origin).

VAT (Value Added Tax)

VAT at 20% is charged on the combined total of the vehicle value, import duty, and shipping costs. This means you pay VAT on the duty as well as on the car itself.

Worked Example: Importing from Japan

NOVA: Notification of Vehicle Arrivals

Before you can register an imported vehicle with the DVLA, you must submit a NOVA declaration to HMRC. This notifies the government that a vehicle is being brought into the UK and ensures the correct taxes have been paid.

• NOVA can be submitted online through the HMRC website — it’s free
• You’ll need the vehicle details, purchase invoice, shipping documents, and your personal details
• HMRC will issue a NOVA reference number, which you’ll need for DVLA registration

Transfer of Residence Relief

If you’re moving to the UK permanently and bringing your own car with you, you may be eligible for Transfer of Residence (ToR) relief. This can exempt you from both duty and VAT, provided:

• You have owned and used the vehicle for at least 6 months before moving
• You are moving your normal residence to the UK
• You have lived outside the UK for at least 12 consecutive months
• The vehicle is for personal use only and will not be sold within 12 months

Temporary Import Relief

If you’re visiting the UK with a foreign-registered vehicle, Temporary Admission relief allows you to use the vehicle for up to 6 months in any 12-month period without paying duty or VAT. The vehicle must remain registered in its country of origin and cannot be sold, lent, or hired in the UK.

Final Thoughts

Import duty and VAT are unavoidable costs when bringing a car into the UK, but they’re predictable and can be budgeted for. The key is to factor in all costs — not just the purchase price — before deciding whether importing makes financial sense. For EU-origin vehicles, the 0% duty rate under the trade agreement makes importing more attractive. For non-EU imports, the 6.5% duty plus 20% VAT adds roughly 28% to the landed cost.

Tax rates and relief schemes can change. Always verify current rates with GOV.UK and HMRC.