Purchasing a customs concession vehicle saves customers a fifth of the car's value Published Nov. 19, 2009 100th Air Refueling Wing Legal Office RAF MILDENHALL, England -- Thinking of buying a car? Thinking of selling your car? Sure, you're looking for a good deal, and trying not to get ripped off, but have you thought about the taxes? Here are some important things for an American servicemember to know about cars imported to the United Kingdom: What's a customs concession vehicle? Agreements between the governments of the United States and the United Kingdom allow active duty members and civilian component members to import and purchase privately owned vehicles for their personal use, free of import duty and value added tax. ("Civilian component members" are U.S. civilian personnel stationed in the U.K. and employed by Department of Defense agencies.) The amount of money saved is substantial. It's more than a fifth of the car's value. Any car imported into the UK by a member without paying these taxes is known as a customs concession vehicle. It can be imported from the US or another country; if the taxes aren't paid, it's a customs concession vehicle. How many customs concession vehicles can I have? As the servicemember or civilian component member, you can have one vehicle if you're single or unaccompanied, two if you're married and accompanied. How many customs concession vehicles can my spouse have? Unless your spouse qualifies as an active duty or civilian component member, the answer is none. It's the member that's entitled, not the spouse. This doesn't mean the spouse can't operate the car or buy fuel for it. It does mean that having the car in the UK without paying importation taxes and duties is the member's entitlement, not the spouse's. It's the member who has a right to keep the car, ship it, scrap it, or sell it. How many British cars can I have? You may own as many as you like. They're not customs concession vehicles, so your only limits are your budget and your driveway. However you are only entitled to base fueling privileges for two vehicles and one motorcycle per member, regardless of how many vehicles you own. Who can buy my customs concession vehicle? Only another person entitled to a concession vehicle can buy it from you, unless the importation taxes and duties are paid. If the car is sold to a British person, for example, the taxes must be paid. If it's sold to another active duty member who already has his/her quota of concession vehicles, then the taxes must be paid. Who has to pay the tax? If you sell your car to someone who's not qualified to own a concession vehicle (or another concession vehicle), you are responsible for paying the taxes. You will need to contact the Pass and Registration office who will complete the necessary forms to have your vehicle assessed. Try to do this before you sell the vehicle, because once it is sold to a non-entitled person, the taxes must be paid. If you fail to pay the taxes at the time of the sale you'll get a bill later from the British government. There's a good chance it will come long after you've lost touch with the person who bought your car. If you want to negotiate the taxes and duties as part of the selling price, you can, but you must be prepared to pay importation taxes and duties on the car you've sold. What happens if the importation taxes and duties are paid? The car is no longer a customs concession vehicle; it can be bought and sold on the same basis as any other vehicles in the U.K. What if my car has died and I'm scrapping it? It's a good idea to talk with Pass & Registration before you do this. (In fact, it's a good idea to talk with them before selling or buying a concession vehicle any time.) Remember, selling a car to a scrapper is selling it to someone who isn't entitled to customs concession vehicles. Right now, the UK government's policy (which could change in the future) is that if a car is sold to a registered scrap dealer, and the dealer pays you £100 or less, then the importation taxes and duties are waived. If it's more than £100, or if the scrapper isn't registered, you must pay. I'm leaving the UK ahead of my spouse. I can leave a power of attorney with my spouse to ship the car for me, right? Under current law, only a member in an emergency PCS can use a power of attorney for this purpose. The law is currently being amended to allow for cases of extreme hardship. Make no mistake, this really means extreme. The Air Force doesn't get to approve or disapprove extreme hardship cases; the decision is made by HM Revenue and Customs, part of the British government. This should be viewed as a last resort. For more guidance you can consult with the legal office or with Pass and Registration. Can I use a power of attorney for someone to sell my car? The same rule applies: Only a case of emergency PCS or extreme hardship would allow this. Can I give my British friend a power of attorney to operate my customs concession vehicle? No. Let's look at some examples: Sergeant Sargent, who is single, has a concession car that's dying an ugly death. He wants to replace it by buying another concession vehicle from Airman Ehrmann. Can he do it? Yes, but he must get rid of the first vehicle at the same time. He can't own and operate two concession cars at the same time. When Sergeant Sargent goes to scrap his concession car, he calls the number on a sign offering good money for American cars. The business he calls offers him £250 for the car--more than he's been offered anywhere else. Should he take the offer? Probably not, without losing money on the deal. If he sells to a scrapper for more than £100, he'll have to pay the taxes, which could easily be more than the extra money he's been offered. If, however, he goes to Pass and Registration, and goes through the process of having his car assessed, he can find out exactly how much the taxes will cost and can make a fully informed judgment before accepting or rejecting the offer. Colonel Kernal and her civilian husband (who's not a civilian component member) have a concession vehicle they shipped with them at PCS. They want a second car and are thinking of buying a concession vehicle that Major Maydger has on display outside the Bob Hope Center. Can they do it? Yes. Colonel Kernal is married and accompanied, and entitled to two concession cars. Later on, Colonel Kernal's son gets a license and the Kernals want to get a third vehicle. Can they buy a customs concession vehicle? No; the Colonel has already reached her quota. They'll have to buy a British car, or taxes and duties will have to be paid. In addition, they Kernals won't have base fueling privileges for more than two cars and one motorcycle. If you're looking for more information or guidance on customs concession vehicles, see Pass and Registration or the base legal office.