Import duty and VAT on cars, explained
How much tax you’ll pay to bring a vehicle into the UK, how it’s calculated, and when you might pay less or nothing at all.
By the AutoImporter team6 min read
Tax is often the biggest cost of importing a car after the car itself. The good news is that the rules are clear once you see them laid out.
The standard rates
For most cars coming from outside the UK:
- Import duty: 10% (0% for cars built in Japan, see below)
- Import VAT: 20%
What the tax is calculated on
Duty is calculated on the customs value: the price of the car, plus shipping and insurance to the UK. VAT is then calculated on the customs value plus the duty. That means you pay VAT on the duty too.
| Item | Example |
|---|---|
| Car price | £20,000 |
| Shipping + insurance | £1,750 |
| Customs value | £21,750 |
| Duty at 10% | £2,175 |
| VAT at 20% of £23,925 | £4,785 |
| Total tax | £6,960 |
Illustrative example only.
When you might pay less
Cars built in Japan. Under the UK–Japan trade agreement (CEPA), vehicles built in Japan pay 0% import duty, as long as a valid origin claim is made. You only pay VAT. On the example above, that would mean £0 duty and £4,350 VAT: a saving of over £2,500. A car sold in Japan but built elsewhere pays the standard rate.
Historic vehicles. Cars over 30 years old, in original condition and no longer made, can qualify for 0% duty and a reduced 5% VAT rate.
Transfer of Residence relief. If you’re moving to the UK, have lived abroad for at least 12 months and have owned and used the car for at least 6 months, you may pay no duty or VAT at all.
Cars from the EU. Vehicles that qualify as UK or EU origin under the trade agreement can be duty-free, though VAT still applies.
Motorcycles and vans
Motorcycle duty is usually 6–8% depending on engine size. Most vans are charged at 10%.
Every AutoImporter quote shows duty and VAT as separate lines, so you can see exactly where the money goes. Try the calculator.