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Used car dealers urge clarity over 'new fees' for cross-border trade


Change: Michael Gove said VAT on profits would be reinstated

Change: Michael Gove said VAT on profits would be reinstated

Change: Michael Gove said VAT on profits would be reinstated

Second-hand car dealers are seeking answers on whether they will be able to move vehicles over the border without hefty extra tariff and customs fees.

Revenue Commissioners in Dublin will make a call on whether vehicles moved over the border will face a more than 30% hike in charges.

The strict language of the Withdrawal Agreement suggests Northern Ireland dealers can import vehicles from Britain, then sell them on without the added cost, said Cecil Hetherington, managing director of Used Cars NI.

"It is still up for discussion whether it is possible for cars to be sold through NI if proof is shown they were imported from GB," said Mr Hetherington.

"However, people from the RoI Revenue are saying something different at the moment.

"We are trying to work it out as we speak."

Earlier this week local dealers learned with relief that they will avoid having to pay 20% Vat on the value of used vehicles imported from Britain under the Brexit protocol.

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Cabinet Office Minister Michael Gove said the Government would instead reinstate Vat on profits, saving dealers thousands of pounds.

Cars bought new here, then sold second-hand in the Republic, will face Vehicle Registration Tax (VRT) and NOx emission costs already in place, but nothing extra.

However, if a dealer from the Republic travels to Britain, buys a car second-hand and brings it back, a 21% tariff and 10% customs fee will be added to the cost.

The potential advantage for local used car dealers over those based in the rest of the UK is clear if they can sell cars on in the Republic.

Dealers are trying to clarify whether they are able to buy in Britain, bring the vehicle over, then sell across the border without incurring the extra cost.

There is a "brisk trade" between Britain and the Republic, but that is going to be disrupted, said Mr Hetherington.

"For buyers of used cars in the south, the net effect will be higher prices and less choice in used cars as a current source of supply is being cut off," he added.

Representatives were told by the Republic's Revenue officials that it is all based on rules of origin - that if the vehicle is manufactured in, or has passed through Britain, then it will be subject to the increased cost, Mr Hetherington said.

But the Withdrawal Agreement wording suggests to him "we can bring them through Northern Ireland" without facing tariffs and customs costs.

He added there is the possibility the Republic's tax collectors could face a legal challenge if they do impose the charges.

Meanwhile, Sinn Féin MP Francie Molloy has welcomed confirmation that used cars imported from Britain and sold to businesses and consumers here will not incur the higher Vat charges.

"This additional 20% would have crippled many businesses in the North, resulted in the loss of jobs and resulted in families paying extra money for cars," the Mid Ulster MP said.

DUP MP Sir Jeffrey Donaldson has already welcomed the move, saying the protocol was "on the verge of destroying practically every second-hand car business in Northern Ireland".

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