Revenue and Customs Brief 12 (2014): change of use of a vehicle after entering the UK
Published 28 March 2014
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This publication was originally archived on 27 January 2015.
Purpose of this brief
This brief explains changes to the rules regarding the notification to HM Revenue and Customs (HMRC) of vehicles arriving in the UK where the intention of the ultimate use of a vehicle changes after the vehicle has entered the UK. The rule changes are to prevent penalties for late notification being generated where there is such change of intention.
The changes will also allow the use of the online notification system rather than the paper form.
These new rules will be introduced from 1 April 2014.
Who needs to read this?
- VAT registered businesses authorised to register vehicles through the DVLA secure registration scheme (SRS) using form V55/1 or V55/2 or the web-based equivalent Automatic First Registration and Licensing (AFRL) system
- anyone who brings a vehicle into the UK with the intention that the vehicle will not remain in the UK for longer than 6 months
Background
Change of intention by VAT registered businesses authorised to use the SRS/AFRL
Notification of Vehicle Arrival (NOVA) rules was introduced on 15 April 2013 as an anti-fraud measure to tackle the problem of motor vehicles being brought into the UK without the payment of VAT. Since 15 April 2013, subject to certain exemptions listed in Information Sheet 6 (2013), it is a legal requirement to notify HMRC of the arrival in the UK of any land vehicle brought permanently into the UK, within 14 days of the date of arrival. One of the exemptions is for vehicles registered with the DVLA through the SRS using a V55/1 or V55/2 form or the web-based equivalent ARFL system.
A business approved to use the DVLA SRS/AFRL does not ordinarily have to notify the arrival of vehicles that it brings into the UK to HMRC through NOVA. Instead the business will notify the vehicles to the DVLA as its customers require the vehicles to be registered for road use in the UK. However, where customers do not require their vehicles to be registered for road use in the UK (for example, agricultural vehicles for off-road use) the business will not notify the vehicles to the DVLA and will therefore need to notify their arrival to HMRC using NOVA. In such cases, as a customer’s decision regarding the ultimate use of the vehicle may not be made until after the 14 day NOVA notification time limit has passed, the business currently runs the risk of incurring a penalty for late notification.
Change of intention of vehicles brought into the UK on a temporary basis
A business or an individual which is not required to register the arrival of a vehicle with the DVLA because the intention on arrival is that the vehicle will stay in the UK for no more than 6 months in a 12 month period does not have to make a NOVA notification.
If, once the vehicle is in the UK, the business or individual changes its mind and decides to keep the vehicle permanently in the UK and register it with the DVLA, a NOVA notification has to be made within 14 days of the date of the change of intention as opposed to the date of arrival. However, under the current rules, if there is a change of intention of a vehicle which is not required to be registered with the DVLA (for example an off-road tractor), there is no such extended notification period and the business or individual runs the risk of incurring a penalty for late notification.
Currently a change of intention notification has to be made using the VAT NOVA 1 paper form rather than the quicker online system.
New rules with effect from 1 April 2014
Change of intention by VAT registered businesses authorised to use the SRS/AFRL
With effect from 1 April 2014, where a VAT registered business which is authorised to register a particular vehicle through the DVLA SRS/AFRL system intends at the point of the arrival of the vehicle in the UK to register that vehicle through the SRS/AFRL system but subsequently changes that intention, the business must make a NOVA notification within 14 days of the change of intention. The decision not to register the vehicle through the SRS/AFRL system will usually be as a result of a decision by the business’ customer that it does not require the vehicle to be registered for road use in the UK, but there could be other reasons.
HMRC is aware that in some cases the business responsible for making the NOVA notification may not become aware of the change of intention for some time after the vehicle’s arrival in the UK. For example, where a manufacturer brings a vehicle into the UK (and is therefore responsible for making a DVLA or NOVA notification) and sells the vehicle on to an authorised dealer, the dealer might not immediately inform the manufacturer that the vehicle has been sold to a customer who does not want the vehicle to be road-registered. In such cases, HMRC accept that such a business will not be in a position to make a change of intention decision before that information becomes available and that the 14 day notification period will run from the date when the business becomes aware of the change of circumstances.
Change of intention of vehicles brought into the UK on a temporary basis
With effect from 1 April 2014, any individuals or businesses who bring their vehicles -into the UK on a temporary basis (no more than 6 months in a 12 month period) and then change their minds so that the move becomes permanent but do not intend to register the vehicles with the DVLA must make a NOVA notification within 14 days of the date of the change of intention. This allows them to benefit from the extended notification period in the same way as individuals or businesses who intend to register their vehicles with DVLA.
Use of the online NOVA system to notify changes of intention
From 1 April 2014, the date of the change of intention (with regard to both vehicles where the intention was to register them through the DVLA SRS/AFRL system and vehicles brought into the UK on a temporary basis) will be deemed to be the actual date of arrival. This means that the where a change of intention has taken place, the date of the change of intention should be entered as the date of arrival when completing either the online NOVA system or the VAT NOVA 1 paper form.
As a result, any individuals or businesses who are eligible for the extended notification period can now benefit from the quicker processing time of the online system instead of having to complete the paper form.
Find out here how to access the NOVA online service
Issued 28 March 2014