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HMRC internal manual

VAT New Means of Transport

Diplomats and visiting forces: UK/NATO forces returning from EU member-states

Returning members of UK/NATO forces and civilian staff can claim entitlement to relief where relief has been granted in the host member-state under the Article 151 of Directive 112/2006 (the Principal VAT Directive). Relief will normally be given whether the vehicle is

  • acquired into that member-state (for example from the UK), or
  • purchased new in that state.

However, the vehicle must be granted tax-free status in that member-state (or taxed there); if it is not, then on arrival into the UK tax will be due in the UK.

The entitlement to relief applies whether the personnel are posted back to the UK or simply return the vehicle while remaining overseas themselves.

The entitlement to relief applies even if the vehicle is still technically a new means of transport on arrival, unless it is a returning new means of transport and the return was contemplated at the time of original removal - that is, where there was no real intention to remove the new means of transport and removal was simply to obtain a tax advantage.

Tribunal VTD 13583: Peter James Illtyd Lane decided that a vehicle supplied in Germany after an army officer had been notified of a posting back to the UK was supplied as an acquisition into the UK.

They must also comply with the requirements described in Notice 728 New means of transport. Where these requirements are met and the NATO personnel and civilian staff are returning from Germany they must obtain Form BFG 414 from:

Customs and Immigration
British Forces Liaison Organisation

The HQ C&I office in Germany will submit authorised on-line NOVA notifications on behalf of entitled BFG personnel

And from Cyprus, Form BFC 414 from:

SBA Customs
RAF Akrotiri

Note also that the forces’ regulations (in Germany only) require the personnel to retain ownership of the means of transport for a minimum of 12 months from the date of BFG Registration. Where there is evidence that this has not been the case, the PTU should be informed and a VAT liability may arise in the UK or in Germany due to a breach of those conditions.

Where NATO personnel or civilian staff are returning from any other member-state they must provide evidence to show that the vehicle had been registered for road use in the member-state and the host authority relieved the tax; this must accompany the VAT NOVA1 and forwarded to the PTU. If it was not then you must refer the matter to the PTU (VATNMT2000).