Over the years, many Irish motorists have opted to import their car from the UK instead of buying one at home in Ireland. In 2019 alone, 109,000 cars were imported into Ireland from abroad, primarily coming from the UK1. Why? Savings! But since the UK’s official departure from the EU there have been some changes to this process that make it slightly more complicated and expensive than before. Whether you’re confused about the paperwork, process or additional costs, we’ve rounded up all the key factors you’ll need to consider when importing a car from the UK in a post-Brexit world.
Why import a car from the UK?
When the UK voted to leave the EU back in 2016, the demand for imported cars significantly increased. In fact, up until last year, around 100,000 cars were being imported from the UK into Ireland every year2. But why the sudden increase in demand? Well, for one, the UK’s decision to leave the EU led to an immediate drop in the strength of Sterling against the Euro3. A weaker pound meant car buyers seeking a bargain were able to take advantage of the weaker exchange rate and drive away with a good saving (excuse the pun).
How do you import a car from the UK?
Before January 1st of this year, Irish motorists importing a vehicle from the UK weren’t subject to paying Value Added Tax (VAT). The car dealer would fill out a form to notify that car was leaving the UK and you would pay Vehicle Registration Tax (VRT) once the car arrived in Ireland. Now that the UK has been officially deemed a ‘third country’ by the EU (in other words, a non-EU country), the process isn’t as easy as signing on the dotted line and driving off into the sunset. So, what’s changed? You now need to fill out a customs declaration, pay or account for custom duty of 10% and VAT at 23% before presenting the vehicle for registration4. These additional charges are naturally going to add to the initial price tag, but by how much? To give an example, it would now add a cost of around €4,000 onto a car valued at €20,0005.
What about importing from Northern Ireland? Under the trade agreement Northern Ireland continues to be treated as an EU country, this means you won’t be required to fill out a customs declaration form6. However, you will still need to prove that one was made if the vehicle was first registered in the UK6. You’ll also still be liable to pay VRT and VAT at 23% (only if the car is new)7 once it arrives in Ireland.
What are the VRT rates?
We mentioned Vehicle Registration Tax (VRT) earlier, but what is it and how exactly is it calculated? VRT is a tax you must pay to register your vehicle when bringing it into Ireland. It’s based on the Open Market Selling Price (OMSP) of the vehicle – this depends on a number of things such as the market value, engine size, year and model6. Since January 2021, new rates were introduced to calculate the levels of carbon dioxide (CO2) emissions and the car’s nitrogen oxide (NOx) emissions7. Below, you can see at-a-glance what bracket you might fall under and what it might cost you roughly if you were to import.
Calculation of CO2 charge:
|CO2 emissions levels||VRT rates|
|0 - 50 grams per kilometre||7% of OMSP (minimum €140)|
|50 – 80 grams per kilometre||9% of OMSP (minimum €180)|
|80 –85 grams per kilometre||9.75% of OMSP (minimum €195)|
|85 –90 grams per kilometre||10.5% of OMSP (minimum €210)|
|90 –95 grams per kilometre||11.25% of OMSP (minimum €225)|
|95 - 100 grams per kilometre||12% of OMSP (minimum €240)|
|100 –105 grams per kilometre||12.75% of OMSP (minimum €255)|
|105 - 110 grams per kilometre||13.5% of OMSP (minimum €270)|
|110 – 115 grams per kilometre||14.25% of OMSP (minimum €285)|
|115 – 120 grams per kilometre||15% of OMSP (minimum €300)|
|120 – 125 grams per kilometre||15.75% of OMSP (minimum €315)|
|125 – 130 grams per kilometre||16.5% of OMSP (minimum €330)|
|130 – 135 grams per kilometre||17.25% of OMSP (minimum €345)|
|135 – 140 grams per kilometre||18% of OMSP (minimum €360)|
|140 - 145 grams per kilometre||19.5% of OMSP (minimum €390)|
|145 – 150 grams per kilometre||21% of OMSP (minimum €420)|
|150 – 155 grams per kilometre||23.5% of OMSP (minimum €470)|
|155 – 170 grams per kilometre||26% of OMSP (minimum €520)|
|170 - 190 grams per kilometre||31% of OMSP (minimum €620)|
|More than 190 grams per kilometre||37% of OMSP (minimum €740)|
Calculation of NOx charge:
|NOx emissions (NOx mg/km or mg/kWh)||Amount payable per mg/km or mg/kWh|
|The first 0-40 mg/km or mg/kWh, as the case may be||€5|
|The next 40 mg/km or mg/kWh or part thereof, as the case may be, up to 80 mg/km or mg/kWh, as the case may be||€15|
|The remainder above 80 mg/km or mg/kWh, as the case may be||€25|
What other costs do you need to consider?
If you’re thinking about importing a car from the UK, it’s important to make sure you’re getting the best EUR/GBP exchange rate. To get a better understanding of this, let’s have a look at previous exchange rates and where these are predicted to go in the future. Following the Brexit referendum result in 2016, Sterling began to weaken significantly against the Euro overnight. Over the course of the following 3 months, this drop would stretch to almost 18%8. Fast forward to 2021, with the news of vaccine rollouts and the potential of the UK reopening their economy before other EU countries, we’ve now seen an increase in the strength of the pound9.
What does all of this mean, though? Well, it goes to show that the exchange rate can fluctuate based on a myriad of factors and in order to get the best rate, it all comes down to timing. Many companies will give you the option to keep your money in a virtual wallet so you can hold out for a competitive rate. Another factor to consider is delivery, how are you going to get the car from A to B? Given the current travel restrictions, hiring a company to deliver the car will be your best (or only) option – which could set you back around €5008.
As you can see, there is lots to consider before making your purchase overseas and it’s well worth doing your research before deciding if it’s the right option for you.