Possible WTO/Brexit 10% tax implication

[PhilR]

So if Boris & Co. don't come up with a sensible solution with the EU, a 10% tariff will apply to our order after 1st January. On ours that will be around £6,500! That's not something we would be happy about, obviously.
My question is, if this is to happen, are you legally obliged to have to pay this or can you withdraw from your agreement, penalty free? Liverpool said that we'd not lose our deposit and could just cancel. Is this correct? I'm guessing that under consumer law, you have a chance to pull out of the deal you signed up for if the price changes. Or you can continue with the order if you pay the 10%. If that was the case, how is that 10% added - to the PCP, deposit, up front??
We are literally about to pull the trigger on ordering a Cali, but we would feel a lot better if we have an opportunity to cancel at no cost. Liverpool quoted a £500 deposit, another dealer said £1000. I wouldn't want to lose either though. I also wouldn't want to have to cancel my order and I hope something gets sorted.

 

[AlisonF]

It’s an interesting question. I made an order in July (Kombi not Cali) and was told 12-16 weeks delivery. Have just been informed provisional build week early November... so likely delivery could slip to 2021... so my assumption would be that in my case the original contract should hold. As 16 weeks would be mid November.
In your case, where you are yet to sign a deal, I would definitely be asking questions (not just from sales manager but also finance manager, etc.) on possible outcomes and getting things agreed on paper...

 

[CamperFam]

From my understanding - you would be under no obligation, and nor would VW.

It's not VW's fault, nor yours. So neither party would be liable to commit to the original contract.

 

[Camperfamily]

So if Boris & Co. don't come up with a sensible solution with the EU, a 10% tariff will apply to our order after 1st January. On ours that will be around £6,500! That's not something we would be happy about, obviously.
My question is, if this is to happen, are you legally obliged to have to pay this or can you withdraw from your agreement, penalty free? Liverpool said that we'd not lose our deposit and could just cancel. Is this correct? I'm guessing that under consumer law, you have a chance to pull out of the deal you signed up for if the price changes. Or you can continue with the order if you pay the 10%. If that was the case, how is that 10% added - to the PCP, deposit, up front??
We are literally about to pull the trigger on ordering a Cali, but we would feel a lot better if we have an opportunity to cancel at no cost. Liverpool quoted a £500 deposit, another dealer said £1000. I wouldn't want to lose either though. I also wouldn't want to have to cancel my order and I hope something gets sorted.

Get a copy of the proposed contact from the dealer and read it thoroughly for clauses relating to this circumstance. Same goes for changes in VAT, for example. Otherwise you may be relying on what others think the contact ought to say and how it ought to apply. Sorry, not a straightforward answer.

 

[subthree]

We placed 2 deposits of £500 on second hand Calis before deciding to order new. Both were refunded without issue. When we placed our original order in August 2019 there was a good chance then that WTO rules would be in place late 2019/early 2020 - can't remember exact dates as now bored with B*****. Anyway our dealer was relaxed about refunding us if we wanted to cancel due to B***** or in fact any reason.

It just isn't worth their time trying to enforce anything. They will sell your order to someone else without issue, 10% WTO or not.

Place your order and chill. If you want to pull out the dealer wouldn't be bothered in the slightest.

 

[Calimili]

If you buy the cali tomorrow, i.e. you sign a contract for the purchase of a vehicle, and put a deposit down, you have bought it, you are in a contractual agreement that both parties must honour or there would be a penalty (loss of the deposit).
The tax applies after 1 Jan, so if you buy it then you have to pay the tax.
but you are not buying it then, you are buying it tomorrow. As of tomorrow there is no tax. Doesn’t matter when it will be delivered or paid.
Plus, why on earth would the uk leavy a tax on imports of cars since there isn’t much of car industry left to protect...

 

[subthree]

The tax applies after 1 Jan, so if you buy it then you have to pay the tax.
but you are not buying it then, you are buying it tomorrow. As of tomorrow there is no tax. Doesn’t matter when it will be delivered or paid.

Your interpretation is wrong, certainly for the UK. If there is a new import tax then VW UK will give you the option to cancel without penalty. I know because I went through it with our order 12 months ago. If there is a new import duty, irrespective of when the order was placed, then the customer will pay.

 

[Calimili]

Your interpretation is wrong, certainly for the UK. If there is a new import tax then VW UK will give you the option to cancel without penalty. I know because I went through it with our order 12 months ago. If there is a new import duty, irrespective of when the order was placed, then the customer will pay.

It sounds like a very irrational approach. Why would Hmrc levy a tax for uk residents on purchases that took place before B***** ?

on the other hand why would VW Germany accept orders to be delivered after 1 Jan, knowing that the customers would have the option to cancel the order with no penalty. Especially because they can’t then try to sell rhd vehicles elsewhere that easily.

 

[PhilR]

Thanks all. Interesting. I'm phoning some dealers tomorrow for some quotes so will be interesting to hear their thoughts....
One other thing, have I broken a rule spelling the B word in full?!!!

 

[Calimili]

Thanks all. Interesting. I'm phoning some dealers tomorrow for some quotes so will be interesting to hear their thoughts....
One other thing, have I broken a rule spelling the B word in full?!!!

That‘s unforgivable. How could you dare typing that B word!

 

[Wildcamper]

Suggest you contact HMRC and ask. My understanding is that duty is payable when the vehicle arrives in the UK, time of ordering or manufacturing is irrelevant. So if arrival is 31 Dec then no additional duty, if arrival is Jan 1 then if there is 10% duty it will be payable by someone. But ask those that should know - HMRC.

 

[GrannyJen]

So what did you go for in the end?

Ayers Rock.

A very sad moment. I love my Cali, but I have a job to do. Post that job it will be a Cali again.

 

[Saesneg Shaun]

Doesn’t seem to be a huge issue if you can just walk away from the deal with no penalty. Lots of people will do if the price rises 10%, me included.

 

[Ch1pbutty]

Out of curiosity, what was the price % increase versus last year (2019/2020)

 

[frazered]

If you are buying a Porsche then you would pay, unlikely vw will be able to absorb a 10% duty

Confirmed: 10% import tax on new cars from European Union | Autocar

Government will switch to World Trade Organization rules post-Brexit; tariff could change if deal is struck

www.autocar.co.uk

 

[GrumpyGranddad]

Suggest you contact HMRC and ask. My understanding is that duty is payable when the vehicle arrives in the UK, time of ordering or manufacturing is irrelevant. So if arrival is 31 Dec then no additional duty, if arrival is Jan 1 then if there is 10% duty it will be payable by someone. But ask those that should know - HMRC.

If in transit before 31/12:20 then no duty as I read it.

 

[The Blue Merle]

Ayers Rock.

A very sad moment. I love my Cali, but I have a job to do. Post that job it will be a Cali again.

You won’t know yourself with all that extra space!
Cali are cool vans and I would go back to one, if I didnt spend so much time out travelling. The joker just gives me more creature comforts.
Have you ditched 4x4 or do they do one?

 

[Dassy1308]

I think much will depend on who is ordering what, from where.

The importer will be VW Commercial Vehicles UK, not your dealer, who will therefore be liable for the increased duty.

VWCV might well swallow any additional duty for the time being, then again they might not, and pass it to their customer (ie dealer).

Dealer might well swallow that additional duty, then again might not and pass it to their customer (ie you).

If “No Deal” becomes a likely reality after tomorrow I’d suggest put a reservation deposit down and see how it plays.

 

[Scoots]

As @Dassy1308 states, it’s the importer that pays the duty, not the end user or even the dealer. The duty is due on the cost price of the vehicle coming into the UK, without VAT.

The importer’s and dealer’s profit margins are anyone’s guess but let’s say the vehicle comes in at £40k

I’ve just saved you two and a half grand.

 

[Georgiegirl]

Ayers Rock.

A very sad moment. I love my Cali, but I have a job to do. Post that job it will be a Cali again.

Welcome to the dark side GJ! We now have a Hymer Free 600S and are loving it. Hoping to see you on the Hymercar FB group soon!

 

[GrannyJen]

Welcome to the dark side GJ! We now have a Hymer Free 600S and are loving it. Hoping to see you on the Hymercar FB group soon!

I'm already there

 

[toeknee]

I also started a big thread on this a few weeks ago. Bottom line is that the wording on the contract will indicate Your rights. Most wordings specify that a change in price gives you a right to cancel. I wouldn’t worry about it.

 

[GrannyJen]

You won’t know yourself with all that extra space!
Cali are cool vans and I would go back to one, if I didnt spend so much time out travelling. The joker just gives me more creature comforts.
Have you ditched 4x4 or do they do one?

Ditched.

For the job the main vehicle has to do then 4*4 will probably never be required.

The Cali may still remain in the family anyway

The sad day is 8 months away yet.

 

[soulstyledevon]

Ditched.

For the job the main vehicle has to do then 4*4 will probably never be required.

The Cali may still remain in the family anyway

The sad day is 8 months away yet.

I spotted one of those the other day.
Looks one of the better layouts. Like how the bed raises and you could fit a couple of bikes inside the centre of the van.

 

[Jenny H]

Thanks all. Interesting. I'm phoning some dealers tomorrow for some quotes so will be interesting to hear their thoughts....
One other thing, have I broken a rule spelling the B word in full?!!!

Interested to find out what you say as Im at the same stage - do I dont I - tax or no tax - there's enough decisions about spec etc & with all that on top its such an unknown !