|HMRC Reference:Notice 728 (April 2013)||View Change History|
This notice cancels and replaces Notice 728 (October 2012). Details of any changes to the previous version can be found in paragraph 1.2 of this notice.
Paragraph 3.6 of this notice has the force of law under the VAT Act 1994, Schedule 6, Item 11(2). Paragraph 6.1 of this notice has the force of law under the VAT Regulations 1995, Regulation 155. Section 11 of this notice has the force of law under the VAT Regulations 1995, Regulation 22. These paragraphs are indicated by being placed in a box.
The following rule has the force of law
If you receive a net payment you must include the full value before such deductions (including VAT) in your scheme turnover. This will usually be the value shown on your sales invoice.
It explains how VAT applies to new means of transport.
In the EU most goods are charged with VAT in the country in which they are purchased. However for a new land vehicle, ship or aircraft, VAT will be due in the Member State of destination if:
The definition of a Means of Transport within this notice and when it is ‘New’ is common to all EU Member States and is only for the purpose of determining when VAT is due. Other agencies, for example the Driver and Vehicle Licensing Agency (DVLA), may have different definitions.
References to the Driver and Vehicle Licensing Agency (DVLA) should be read as including The Driver and Vehicle Agency (DVA) in Northern Ireland.
References to "ship" includes "boat" or "vessel".
This notice also provides information on how to notify HMRC about the arrival of any NMT into the UK.
Most of the changes that have been made to this notice since the October 2012 edition reflect the introduction of a new legal requirement to notify HMRC about land vehicles being brought into the UK from 15 April 2013.
Sections 3, 5 and 8 all include changes relating to the introduction of NOVA and how to notify HMRC of the arrival of a land vehicle in the UK.
Paragraph 2.1 clarifies the meaning of "Means of Transport" for this notice only.
Paragraph 3.2 includes changes to the deadlines for notifying HMRC about a vehicle’s arrival in the UK. Please note: the changes to the notification deadlines apply to ships and planes being brought into the UK as well as land vehicles.
This notice and others mentioned are available both on paper and on our website.
This notice should be read by anyone considering obtaining a land vehicle, ship or aircraft in another Member State with the intention of bringing it into the UK and vice versa.
A 'means of transport' for the purposes of this notice is any of the following when it is intended for the transport of passengers or goods:
- has an engine with a displacement or cylinder capacity of more than 48 cubic centimetres, or
- is constructed or adapted to be electrically propelled using more than 7.2 kilowatts (about 9.65 horsepower).
A ship or aircraft or a motorised land vehicle is not new when all the following conditions are met:
A ship or aircraft is not new
A motorised land vehicle is not new
For ships or aircraft it is the earlier of
For motorised land vehicles it is the earlier of
For motorised land vehicles which are removed from Member State of supply without being registered for the road, it is the earlier of
See also paragraph 2.4.
If we are not satisfied that a date of first entry into service has been established in accordance with the guidelines at paragraph 2.3, the NMT may be treated as having first entered into service on the date when the invoice relating to its first supply was issued.
If your answer is yes then go to paragraph 2.6 or if it is no then go to section 5.
This depends on whether you are VAT-registered or a person/business not registrable for VAT – see table below.
Persons not registrable for VAT
VAT is due at the time of acquisition. This is either:
Note: the date the VAT is due is a legal point and maybe different from the date of arrival of the NMT, the date notification of arrival must be made by and the date payment of the VAT must be made.
Please see Para 3.2 for information on when a notification must be made and Paras 3.8 and 3.9 for information on when the VAT due must be paid.
If you purchase an NMT in another Member State to bring to the UK, you must notify us within 14 days of its arrival in the UK or its acquisition, whichever is the later. You may be liable to a financial penalty if you do not notify us within the 14 days.
You must notify HMRC of any land vehicle brought into the UK by using the Notification of Vehicle Arrivals (NOVA) system. If you do not already have access to any of HMRC’s online services you will need to register through HMRC’s website.
The NOVA system allows HMRC to assess whether or not any VAT is due on a vehicle, and if so, make sure it is paid and accounted for correctly. You will not be able to register the vehicle with the DVLA until HMRC has been notified and are satisfied that any VAT due has been accounted for.
For more information on NOVA and how to notify HMRC please refer to the NOVA Information Sheet, available from hmrc.gov.uk/thelibrary/notices
To make the notification about a ship or aircraft you must use Form VAT 415, which is available from our VAT Helpline or can be downloaded from our website. The notification must be in English.
To process your notification the Form VAT 415 should be accompanied by a copy of the final purchase invoice, showing:
We can process your notification more quickly if it is accompanied by these documents.
The completed form should be sent by post to:
HM Revenue & Customs
Personal Transport Unit
St Johns Road
Please note: that the Personal Transport Unit only accepts postal notifications, as there are no public enquiry counters.
The VAT is calculated on the total amount you have paid for the NMT (excluding all trade-ins, part-exchanges or special discounts not freely available to the general public), including any extras you had fitted to it at the time it was supplied, plus any delivery or incidental charges made by your supplier.
For land vehicles, NOVA will automatically calculate how much VAT is due on the NMT. If you are notifying online, NOVA will inform you at the end of the notification process how much VAT is due. If you notify us by using the VAT NOVA1 paper form, we will write to you telling you how much VAT is due.
For ships and aircraft, we will only calculate how much VAT you owe when the documents stated in paragraph 3.4 are received.
This information has the force of law.
For VAT purposes, amounts of money must always be expressed in sterling. If the invoice for your NMT is in another currency, including the Euro, HMRC will convert it into sterling using the rate of exchange current at time of acquisition.
This is normally done using the HM Revenue & Customs’ period rate of exchange, which closely reflects the UK market rate. However, you may make a specific request in writing at the time of notification to use the actual market rate applicable on the date of acquisition. The rates published in national newspapers will be acceptable as evidence of the rate at the relevant time. Rates obtained before the acquisition date are not acceptable. If you do not request the use of market rate at the time of your notification, the HM Revenue & Customs’ period rate will be used automatically.
Yes, you can obtain an estimate if you wish to know in advance how much VAT you would have to pay. You should contact the VAT Helpline, but please note that the final charges may differ because of exchange rate fluctuations or changes to the value of the NMT.
NOVA will calculate the amount of VAT due and notify you, either automatically through the NOVA online system or by letter if you submitted a paper form (VAT NOVA1) notification. You will also receive instructions on how to pay. Please do not send any payment before NOVA has confirmed how much VAT is due.
You will need to pay HMRC the VAT due before you can apply for a UK vehicle registration.
We will calculate the amount of VAT you owe and send you a demand for payment together with instructions on how to pay. Please do not send any payment before you receive the demand, because the amount you calculate could vary due to the different exchange rates used. You must pay the amount of VAT on demand within 30 days of the date on which it was issued.
For land vehicles, failure to notify within 14 days of arrival into the UK may result in a late notification penalty being applied - regardless of whether any VAT is due on the vehicle. If a penalty is due HMRC will confirm in writing the amount due and how it has been calculated.
Please note: you must notify HMRC and pay any VAT due before the vehicle can be registered and licensed with the DVLA or DVA.
For ships and aircraft you may be liable to a financial penalty in addition to the VAT due
You can avoid financial penalties by notifying HMRC in time and by taking care to complete the forms fully and accurately.
You will have a right to appeal if we impose any of the above penalties.
All movements of NMT to the UK are liable to VAT, except where the NMT is a land vehicle constructed or adapted for a disabled person. For more information on VAT relief for people with disabilities see Notice 701/7 VAT reliefs for disabled people and the HMRC help sheet ‘VAT1615 About purchasing zero-rated adapted vehicles (Guidance for Customers)’. See also paragraph 3.12.
Yes, you may be entitled to claim relief from VAT that is due when you remove your NMT to the UK if you meet the conditions below.
you are returning from service in another Member State. Section 4 has more information on whether you qualify for the relief.
You have brought the NMT to the UK on change of residence, which was not contemplated at the time of purchase.
Yes, you can use another person, as an intermediary or agent, to assist you in obtaining your NMT and bringing it to the UK. See also paragraph 3.14.
If you use an agent or intermediary to obtain and bring the NMT to the UK and the supplier’s invoice is raised in your name and given to you by the intermediary, you are still the person responsible for notifying HMRC that the NMT has been brought to the UK and for paying the VAT that is due.
If bringing a land vehicle into the UK, anyone may act as your agent in notifying and paying HMRC using NOVA (see Para 3.3 (above) for information on where to find out more about NOVA). Any penalties, which result from late notification or payment, will be due from you even if your intermediary caused the delay.
If bringing a ship or aircraft into the UK, the declaration on the notification of acquisition (Form VAT 415) should, at all times, be completed by you (the acquirer) and not the intermediary.
Agents who are VAT registered and acting in their own name in relation to the supply of the NMT should use the procedure in section 8.
You must keep your NMT purchase invoice and proof that you have paid the VAT for six years from the date of purchase. You could be asked to demonstrate that the VAT on your NMT has been paid.
If you decide to sell your NMT within the six-year period you are advised to pass your proof of VAT payment to the new owner.
The supply of the NMT should be zero-rated. The supplier of the NMT should seek a refund of taxes paid from their own Member State’s fiscal authority and acquisition tax will be due in the UK.
The supply of the NMT should be zero-rated and the Member State of supply will have rules in place similar to those in the Notice. You will need to confirm the exact procedures to be followed with the supplier. Note that in some Member States the supplier may take a refundable deposit equivalent to the VAT which is refunded once you have paid the VAT in the destination state.
If you have been incorrectly charged VAT or are having difficulty in obtaining a refund of a deposit taken in another Member State this does no affect the liability to pay VAT in the UK on the acquisition. Recovery of the "overpayment" will need to be taken up with the suppler or the relevant tax authority in that Member State of supply.
You can only claim entitlement to VAT relief if you comply with the notification requirements described in section 3. If you meet these requirements you can claim relief at the end of your tour on permanent posting back to the UK. You must be in possession of Form BFG NOVA1 if returning from Germany or Form BFC 414 from Cyprus, in order to register your vehicle.
These forms are available from (respectively):
Customs and Immigration
British Forces Liaison
If you are returning from any other Member State you must provide HMRC with evidence to show that the host authority relieved the tax. If returning with a land vehicle use form NOVA1, if returning with a ship/aircraft use VAT Form 415.
You can claim relief if you produce both evidence of your tax-free status from your head of mission and confirmation that the host Member State has granted you relief on your NMT. If you are returning with a land vehicle form NOVA1 should be used, if you are returning with a ship/aircraft that is a new means of transport form VAT 415 should be used.
If you are normally resident (see paragraph 5.2) in another Member State and you bring your means of transport with you on a temporary visit to the UK, you do not have to notify HMRC or pay VAT on it.
Where you have spent at least 185 days in the last twelve months because of your work and personal connections. But if:
then you will usually be considered to be resident in the country where your personal connections are.
If your plans change, and you decide to stay in the UK and keep your ship or boat here, you do not need to notify HMRC unless either:
If you bring the means of transport to the UK from another Member State, you will not have to pay UK VAT if:
However, please note that if bringing a land vehicle into the UK you must notify HMRC of its arrival through the NOVA system regardless of whether it is new or otherwise.
You will not be able to license and register your vehicle with the DVLA until HMRC have received notification of its arrival from you and confirmed that no VAT is due.
If you are a VAT registered business bringing a land vehicle which is not an NMT into the UK, you may have to account for VAT on your VAT return under the normal rules for intra-EU supplies (see Para 8.1). If VAT is due, the vehicle will be known as a 'qualifying vehicle' for NOVA purposes.
Please see Para 3.3 for where to find more information about NOVA, including information on 'qualifying vehicles'.
Any land vehicle used on public roads in the UK ,will be subject to UK licensing, registration and insurance requirements, which are explained in section 10.
This information is given in the box below.
This information has the force of law.
If you buy an NMT in the UK to take to another Member State, you will be liable for the VAT on the value of the NMT when you arrive there. To make sure that the purchase of the NMT is free of UK VAT, you must comply with certain conditions. These are:
Yes, but normally this will mean the dealer is selling the means of transport to the finance house who in turn sell it to you. If that is the case then you must make sure it is the finance house that is shown as the supplier and the dealer must send the second copy of Form VAT 411 to the finance house for their retention.
Form VAT 411 is your declaration that you will take the NMT to another Member State within two months and pay the VAT there. It is also your supplier’s declaration that they have supplied an NMT to you for removal from the UK.
The form is made up of an original (the top sheet) and three copies. When it has been properly completed, your supplier will send the original copy to us (see paragraph 9.5) and give the first copy to you. The supplier will keep the second copy of the form as part of their business records, and, if the NMT is a land vehicle, they will use the third copy to register it for road use if you are going to drive it out of the UK.
If you are registered for VAT in another EU Member State and you buy an NMT from a VAT registered person in the UK for removal to that State your supplier may zero-rate the supply under normal rules – see Notice 725 The Single Market.
To benefit from zero-rating you must remove the NMT from the UK within two months of the time of supply. You must account for any tax due on the acquisition in the Member State of destination, under the laws of that State.
You must not use your land vehicle on UK roads unless it has been licensed and registered, and is properly insured. Section 10 contains more information on this.
If you purchase an NMT and then find that because of circumstances beyond your control, you are unable to remove it, you should inform us immediately by writing to the address given in paragraph 3.4. See also paragraph 6.8.
When we receive your letter we will calculate the VAT due and send you a demand, which you must pay immediately.
If you fail or are unable to remove your NMT from the UK within the two-month period allowed, you should inform HMRC and pay the VAT, which is due. Failure to do so may make your NMT liable to forfeiture.
You can find more information on 'type approval' and how it affects NMTs that are land vehicles from paragraphs 10.7 onwards.
If you buy an NMT in the UK for removal to another Member State you should consider insuring it for its full value including UK VAT. If for any reason (for example, an accident) it is not removed from the UK, you will be liable for any UK VAT which was not charged at the time the NMT was supplied to you.
It is a legal requirement that you must be insured against third-party liabilities before you drive a land vehicle on UK roads. If your vehicle is registered in the UK, its use must be covered by a policy of insurance issued by an authorised insurer (a member of the Motor Insurers Bureau).
When an NMT (that is a vehicle) is finally removed from the UK, the DVLA require the tear-off portion of the VX302. In the case of a temporary removal to another EU Member State, say for a holiday, the VX302 is not required to be completed. If it is then it can cause problems on return to the UK as the licence is cancelled.
This section will normally apply where a consumer purchases a new land vehicle, ship or aircraft which they then resell while it is still within the definition of a New Means of Transport. You may be entitled to a refund of VAT if you satisfy all the following conditions:
To claim your refund you should write to the PTU (address at paragraph 3.4) at least 14 days (but no more than one month) before you expect to sell your NMT. You can use the form at section 12 to do this.
When we receive your notification (see also paragraph 7.3) we will advise you if we want to examine the NMT before you sell it, to confirm its eligibility for refund.
Before any refund is made we will need to see all the following documents:
No refund will be given until you have produced documents showing all these things. (Your documents will be returned to you promptly.)
The amount of VAT refunded to you will depend on the value of the supply you make to your customer, but it cannot exceed that amount of VAT, which you have already paid when you obtained the NMT.
You should provide the supplier or vendor with your UK VAT registration number to enable them to zero-rate the supply of the means of transport to you. In reality the intra-EU supplies of NMT between VAT registered persons are treated the same as for any other good (see Notice 725 The Single Market); in this case the good happens to be a means of transport' that happens to be 'new'. The rest of this section needs to be read in that context.
If you are registered for VAT in the UK and you buy a VAT-free NMT from a person registered in another EU Member State, you should account for VAT due on your normal VAT return for the period in which you acquired the NMT. See also paragraph 8.3
If the NMT is a land vehicle, it must be licensed and registered before it is used on public roads.
However, please note that you will not be able to license and register the vehicle with DVLA until you have notified HMRC about the vehicle’s arrival through the NOVA system and HMRC have confirmed that the notification has been accepted.
Yes, you must account for acquisition tax on the vehicles you acquire. If they form part of your stock in trade, you may recover input tax equal to the amount of acquisition tax you declared. You must charge output tax on the full value of the supply to your customer.
If you arrange the supply of an NMT from a supplier in another EU Member State direct to a customer in the UK, you are acting as an intermediary. If you act in this way for a person who is not registered for VAT in the UK, you may as part of your service (and subject to your customer’s authorisation) notify HMRC about the acquisition of the NMT on behalf of your principal using the procedures described in section 3, but see also paragraph 8.6.
For land vehicles:
Please refer to the NOVA Information Sheet, available from hmrc.gov.uk/thelibrary/notices for further information.
For ships and aircraft:
The customer, or acquirer if he is the principal, is responsible for the declaration you make on their behalf and for the payment of the VAT, which is due.
You may however make the payment on their behalf. When you trade as an intermediary you must make sure that the customer is provided with the sales invoice from the supplier and the invoice clearly shows the name and address of the acquirer of the NMT and the amount they have paid to the supplier. You should also distinguish clearly between:
For land vehicles:
Please refer to the NOVA Information Sheet, available from hmrc.gov.uk/thelibrary/notices for further information.
Assuming you are registered for VAT in the UK, these depend on whether:
You must meet all the conditions below in order to zero-rate the supply to your customer who will be liable for any VAT in their Member State:
You must meet all the conditions in order to zero-rate the supply to your customer who will be liable for any VAT in their Member State:
You should only complete the ESL form when your customers are registered for VAT in another Member State showing the customer’s registration number and value of supplies made in the reporting period. For more information please see Notice 725 The Single Market.
You must send all originals to:
HM Revenue & Customs
Personal Transport Unit
St Johns Road
See also paragraph 9.6.
Yes, you must submit this within six weeks of the end of the calendar quarter in which you have made the supply.
The first acquirer of the vehicle into the UK is responsible for declaring acquisition tax on his VAT return. The onward supply of the vehicle to business is a standard-rated supply in the UK for which a normal VAT invoice should be issued.
All vehicles used on the UK roads must be licensed and registered. If you purchase an NMT in another Member State and bring it to the UK, the vehicle must be registered and licensed as soon as possible after arrival. You are not legally entitled to use or keep the vehicle on UK public roads until it has been licensed and registered in the UK.
If you purchase a land vehicle in the UK for removal to another EU Member State and the vehicle is not already registered for road use in the UK, it will be allocated a registration number in a special ‘VAT-free’ series of numbers. This allows it to be identified as tax-free for the length of time it remains in the UK prior to removal.
The supplier of the vehicle will obtain the number for you by presenting copy 3 of the Form VAT 411 at one of the DVLA Local Offices (VROs).
Please refer to the links below for updated list of DVLA local offices; the first link is for offices in the UK and the second link is for DVA in Northern Ireland.
DVA Northern Ireland:
10.4 In what other circumstances do I need to register a land vehicle?
If you are VAT registered in another EU Member State and have purchased an unregistered land vehicle that will be used on the road before removal from the UK, you should register the vehicle for road use. Form VAT 411A should be completed and be presented to the DVLA Local Office (see paragraph 10.3) who will allocate a registration mark in the tax-free series.
If your plans change and you decide to keep the land vehicle in the UK permanently, you cannot retain the ‘VAT Free’ registration mark. In these circumstances you should contact the Personal Transport Unit (PTU) for advice.
If you are a visitor to the UK you need no further insurance if your vehicle is:
‘Type approval’ is the official recognition that a land vehicle has satisfied certain international safety standards. You cannot licence and register a vehicle in the UK unless it is type-approved or otherwise exempt. For type approval purposes a motor vehicle is:
If you supply in the UK for removal to another Member State a land vehicle, which is not type approved, and your customer changes their mind about removal and keeps the vehicle in the UK, it may not be licensed and registered here.
NMT vehicles supplied in the UK are exempted from UK type approval requirements for as long as they are relieved from VAT whilst awaiting removal from the UK. If the vehicle is not removed and as a consequence becomes liable to UK VAT, the exemption from type approval is withdrawn. The absence of type approval may affect your ability to register the vehicle in the UK for permanent use on UK roads.
You can find out more about type approval from the Vehicle Certification Agency
11. A Copy of Form VAT 411
This section has the force of law and is referred to in paragraphs 1.3, 3.9, 6.1, 6.2, 6.3, 6.4, 9.3, 9.5, 9.6 and 10.2
This information has the force of law...
The Form VAT 411 is specified in this section of this notice for the purposes of VAT Regulations (SI 1995/2518) Regulation 22C(3)(a).
To download a copy of the form please use the following link VAT411
Information on completing this form is given in section 7.
New Means of Transport: Application for a refund of VAT
Surname (Mr/Mrs/Miss/Dr) ...........................................
Full Address .................................................................
Details of the original supply to you
Name and address of supplier ......................................
The price paid by you (exclusive of VAT) ......................
The amount of VAT paid .............................................
Details of the proposed sale by you
Name and address of proposed purchaser
Name of the EU Member State to which the New Means of Transport is to be removed
Date of proposed sale by you .....................................
Sale price ...........................................................
Details of the New Means of Transport
Motorised Land Vehicle
Length in metres
Take-off weight (kg)
Mileage since first entry into service
Hours of use since first entry into service
Place in the UK where the New Means of Transport is currently kept
Dates and times when the New Means of Transport may be inspected
Amount of refund being claimed .......................................................
I declare that the information I have given and the documents relating to this claim are true and complete.
Please note: no repayment will be considered until HMRC have examined your proof of purchase, evidence of payment of VAT, proof of the sale in question and evidence of removal from the UK.
Throughout this notice the following terms have the meanings shown:
The European Community: Austria, Belgium, Bulgaria, *Cyprus, Czech Republic, Denmark (except the Faroe Islands and Greenland), Estonia, Finland, France (including Monaco), Germany, Greece, Hungary, Ireland , Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal (including Azores and Maderia), Romania, Slovakia, Slovinia, Spain (not the Canary Islands), Sweden, and the UK.
Croatia will become a Member State with effect from 1 July 2013.
*The European Commission has advised that, as the situation stands at present, the application of the Principal VAT Directive shall be suspended in those area of Cyprus in which the Government of the Republic of Cyprus does not exercise effective control. Transactions with those areas will continue from 1 May 2004 to be treated as non-EU transactions.
The United Kingdom: England, Scotland, Wales, Northern Ireland, (including the Isle of Man but not the Channel Islands).
Another Member State
Any Member State of the European Community other than the UK.
New Means of Transport (see the definition in paragraph 2.1).
First entry into service
See paragraph 2.3.
Your Charter explains what you can expect from us and what we expect from you. For more information go to hmrc.gov.uk/charter
If you have any comments or suggestions to make about this notice, please write to:
HM Revenue & Customs
VAT Supply Policy Team
100 Parliament Street
Please note this address is not for general enquiries.
For your general enquiries please phone our Helpline 0300 200 3700.
If you are unhappy with our service, please contact the person or office you have been dealing with. They will try to put things right. If you are still unhappy, they will tell you how to complain.
If you want to know more about making a complaint go to hmrc.gov.uk and under quick links, select Complaints and appeals.
HM Revenue & Customs is a Data Controller under the Data Protection Act 1998. We hold information for the purposes specified in our notification to the Information Commissioner, including the assessment and collection of tax and duties, the payment of benefits and the prevention and detection of crime, and may use this information for any of them.
We may get information about you from others, or we may give information to them. If we do, it will only be as the law permits to:
We may check information we receive about you with what is already in our records. This can include information provided by you, as well as by others, such as other government departments or agencies and overseas tax and customs authorities. We will not give information to anyone outside HM Revenue & Customs unless the law permits us to do so.
For more information go to hmrc.gov.uk and look for Data Protection Act within the Search facility.
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