Do we need to pay VAT on importing?

Are we liable for VAT as well as VRT if we are bringing in a 13-month old company car that has done 39,000 miles and is still being purchased by monthly payments under a lease agreement?

The sale price the company is asking is just the amount to pay off the lease. Is the company legally able to sell the car yet or does the lease have to be paid off first? Also, if a company buys a car under a lease agreement do they pay VAT? We don't want to be stuck with a car we can't import or has hidden costs like VAT. The asking price does seem very good though: £11,000, which is what made me think we will have to pay VAT too. Any feedback will be very helpful.

Thank you

Debbie

Debbie Borton (Letterkenny)

Jul 2016 Filed under: importing

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Expert answer

Hi Debbie,

No, you shouldn't have to pay VAT. VAT is only payable on vehicles younger than six months and/or with less than 6,000km on the clock. Unless it's a very unusual lease that you're paying off, the vehicle's VAT will have been included in the original lease cost.

As far as the legality of the company selling it is concerned, it's up to them if they want to. The leasing company won't care one way or another as long as they they get their money. Just make sure it's a reputable company from which you're buying and make sure you carry out a history check with Cartell.ie on the car to ensure that there are no other outstanding loans or finance agreements. Make sure you get a letter in writing that the firm undertakes to pay off the lease when you buy the car and insist on having proof of that in writing too.

Neil Briscoe - Complete Car Advisor
@neilmbriscoe