The Personal Export Scheme (VAT Notice 707): What You Need to Know

The Personal Export Scheme is a scheme that lets eligible customers buy a vehicle in the United Kingdom free of VAT, provided it is exported out of the UK. This scheme is particularly beneficial for people planning to leave the United Kingdom for at least 6 months, whether they are UK residents or overseas visitors.

Who can use the scheme?

The scheme can be used by:

• Overseas visitors who have not been present in the UK for more than 365 days in the last 2 years, or 1,095 days in the last 6 years, before the date they apply to use the scheme. They must intend to leave the UK and remain outside it for at least 6 months.
• UK residents who intend to leave and remain outside the UK for at least 6 months.

What vehicles can be bought under the scheme?

The scheme can be used to buy new or used:

• Cars
• Motorcycles
• Motorhomes

The scheme cannot be used to buy bicycles or caravans.

What are the conditions of the scheme?

The customer must personally collect the vehicle in the UK and sign a collection certificate. The vehicle may only be used by the customer, their spouse, a chauffeur acting on the customer's behalf, or another authorised person who is leaving the UK and has the customer's permission to use it.

The vehicle must be exported from the UK within 6 months of the delivery date if the customer is an eligible UK resident, or within 12 months of the delivery date if they are an overseas visitor who has not been present in the UK for more than 365 days in the last 2 years or 1,095 days in the last 6 years.

The customer must remain outside the UK with the vehicle for at least 6 consecutive months from the date the vehicle is exported. The customer must not dispose of, or attempt to dispose of, the vehicle in the UK by hire, pledging it as security, sale, gift or any other means.

If the customer does not meet all the conditions, VAT will become due on the value of the vehicle at the time of purchase, and the vehicle may be liable to seizure.

What are the seller's obligations?

The seller must supply and issue an invoice for the VAT-free vehicle directly to the applicant. In addition, the seller must make sure the customer is eligible to use the Personal Export Scheme, that the customer has received and read a copy of sections 1 to 7 of Notice 707, and that the customer agrees to meet all the conditions of the scheme.

The seller must also keep a dated vehicle collection certificate, which must be signed by the applicant. The seller must also keep separate records for every vehicle supplied under the scheme, showing the delivery date, the applicant's name and UK address, details of the vehicle supplied, the amount of VAT not charged on the delivery price — including the price of any accessories or extras — and any delivery costs, less any discounts given.

Summary

The Personal Export Scheme is a beneficial scheme for people planning to leave the United Kingdom for at least 6 months, letting them buy a vehicle free of VAT. However, both sellers and customers must meet a number of conditions to use this scheme.