Classic cars and Brexit – where are we now?

By Jack Phillips

| 22 Mar 2021

Classic & Sports Car – Classic cars and Brexit – where are we now?

Uncertainty has characterised not just the past 12 months, but ever since the British public voted to leave the European Union.

More than four years later, the lack of clarity remains.

That the deal was signed on Christmas Eve, less than a week before Britain began a new year effectively adrift from the Continent for the first time since 1973, only sowed confusion on both sides of the Channel.

There has been no time for theory, only for seeing it in practice.

Racers will need a carnet

“I phoned the customs helpline to ask what was going on,” explains Dorset-based classic dealer Michael Wise, “and I was told: ‘I’m sorry Mr Wise, I haven’t got a clue.’”

The result is that conversations surrounding the 1961 Jaguar E-type S1 that has interested a customer in the EU are on hold.

He adds that enquiries from Europe have not yet dropped: “Because it’s not until the deal is done and you’re looking at logistics that it becomes a mess.”

There are known knowns, though.

The pandemic might have bought some people time to catch up with the change of regulations

Visiting Europe will not require a visa, but for work it will – except France. You’ll need one for each country, which means costs will rack up.

Attending business meetings will not require a visa so long as you do not exceed 90 days in the EU within 180. Professional goods will require a carnet if they are being used for work.

“Tourism is extremely important to the UK,” says Wayne Scott, director of communications for the Federation of British Historic Vehicle Clubs.

“That doesn’t matter whether you’re going over to do a historic rally or for a holiday in your daily driver.

“The tour operators are very optimistic and happy. A lot of the people that go on these tours remember what it was like before the UK was in the EU and they did it quite happily.”

Changes will be felt most at ports

A green card from your car insurer is a must, with lead times varying, and not having one could cause problems at borders. Those in Northern Ireland may receive one when renewing.

“It confirms that you are covered with the minimum requirements of the country you are driving into,” continues Scott.

“You always had to let insurers know you were going abroad, anyway. A lot of border controls will want to see a V5; you always needed that with you, too, especially in France. We are not aware of any international driving permits that will be required.

“You’ll need a GB sticker instead of relying on an EU flag on your numberplate, but France has insisted on a GB sticker for years.

“Even before Brexit there were subtle differences in road laws between EU countries – you’ll remember the great debacle about breathalysers in France – perhaps that’s a bit more acute.”

“If there’s one thing the historic community has it’s resilience, and innovation to keep our cars on the road”

If personal travel is clear-cut, goods are where the confusion lies, whether it’s cars or components, permanently or temporarily.

For the average parcel, the process at the Post Office is simple: a CN22 form for goods of up to £270, otherwise a CN23, and declarations of what is in the Jiffy bag need to be detailed.

Receiving parcels valued at less than £135 won’t require any further payment because VAT will be taken at the point of purchase – a headache for companies rather than consumers.

But as Franco Roselli, managing director of Surrey-based Italian parts specialist Ricambio, points out, delivery firms have been adding a ‘Brexit charge’.

“We’re getting varied quotes,” he says. “We use DHL and they’ve chosen to slap £4.50 [€5] on every parcel into and out of the EU via the UK.”

Parts supply could be affected

The process itself is not necessarily a problem, but daunting for some or simply another obstacle for stretched workforces.

“We were prepared for the worst-case scenario,” Roselli says. “We spent a year’s worth of budget in a month, but we still didn’t get all the anticipated parts arriving.

“I have stuff that was stuck in ports over Christmas dribbling through now. Some have been returned to sender because of the deadline – I was told that anything collected before wouldn’t incur charges. But it’s not causing massive problems.

“We’ve had companies say they are not sending stuff to the UK any longer. Possibly they can’t get their head around the paperwork, but it’s actually simple.

“We export parcels daily around the world – to Japan, America, Australia – and it’s no different, so we’re used to it. It’s commodity codes and export paperwork, which adds a minute or so to booking in an order.”

Some companies had halted deliveries to and from mainland Europe because of mounting processing fees, and delivery charges have rocketed from some firms, while some such as Ricambio had an influx of overseas orders.

Classic cars have certainly not been exempt from the Brexit headaches

“Like all things in bureaucracy it gets quicker as you get used to doing it,” Scott says. “There’s a lot of concern [from the clubs], but I don’t think problems have been encountered.

“If you look at where a lot of our parts are sourced they’re not actually from Europe. They are from much further afield, and if not they’re made in the UK.”

However Martin Horrocks, who works in international sales and logistics with Spanish firms Italclassic and Classic Cars Jarama is more cautious: “The EU specialists I work with who have previously bought parts and bought or sold cars into the UK say that such trade is unlikely to continue. We do not want to deal with the local customs offices, we have always seen customs clearance as something to avoid.

“The parts that we have bought from good and loyal suppliers in the UK can easily be sourced from equally good and loyal suppliers in Holland, Germany, France, Italy and so on.

“In the occasional instance that something can only come from the UK, then we will buy from the UK, just as we have used suppliers in the USA or Switzerland minimally in the past.”

Multi-country rallies will run, says HERO

One of the biggest hurdles, as Wise illustrates, is the movement of cars.

Leading historic rally organiser HERO-ERA has been attempting to regroup following the COVID-19 disruption while preparing for Brexit.

“There’s a difference between driving your car over and those that are being transported,” says Tony Jardine, communications director.

“We’re trying to work out what it means for the long-distance events. Some will say they can’t do them because budgets are already tight, but the feedback is that people will find a way. I can’t see any massive warning signs that say we cannot do our multi-country events.”

Worst affected are the haulage firms. EM Rogers Transport, a specialist in classics, is also now a customs agent, according to director Sarah Boyson: “We’re on the frontline in two respects. One thing that has surprised a lot of people is that there’s a lot of paperwork and preparation if a car is going out of the country permanently, whereas previously it could just get on a truck and go.

“Because of the free trade agreement most hadn’t realised that VAT would be payable, so we’ve had to explain that unfortunately it definitely is. The cost of customs clearance has turned out to be high, too.

“A car coming here that’s under 30 years old will have normal rates of VAT, 20%, or 5% for cars that are over. But it could be variable in different countries. With a valuable modern car there’s going to be high rates of charges that could be prohibitive. Just to move a car, the customs handling fees on the EU side of things are high.”

EM Rogers tells us it is at the frontline with customs and haulage

Horrocks has concerns, too: “Imagine a transporter full of very valuable cars going from UK to the Mille Miglia. An irregularity with just one car might see the transporter stuck a border, no matter what you insist on back at base.

"We will now pay £1089 (£900+VAT) to send a car to the UK. Before 1 January 2021 that was £700. This is because of new customs clearance fees, but also partly because the carrier is running more or less empty from the UK, demand having stalled because every car imported is now charged VAT at 21% of its current value.

“This is not teething trouble, this is fundamental ongoing change. Most of the UK classic market is internal, that will carry on, but that cannot expand to compensate for the hit that losing EU customers and trade will have. That cake will be redistributed amongst EU suppliers."

“Importing cars from the UK is much less attractive, to the point where it needs to be something very special to justify the hassle and expense," Horrocks continues. "From what I see, The Netherlands is very well-placed to be the sales hub for classic cars in Europe.”

If, however, you are moving cars, expect it to take a day or two to ensure everything is in order to avoid any problems and delays, or even being denied entry.

According to Motorsport UK, competition cars for race meetings in Europe will require a carnet, with the premium being either a refundable deposit of 40% of the vehicle’s value or a non-refundable insurance premium to cover that cost.

Companies running overseas events want to keep the sense of adventure

Sir Greg Knight MP, chair of the All Party Parliamentary Historic Vehicle Group, has offered his support: “There will inevitably be changes that impact upon historic vehicle owners but this Government says it is committed to keeping red-tape to a minimum. The All Party Group will seek to hold them to this commitment.

“Further, trade is a two-way street, so we should assume some goodwill on behalf of our former European partners.

“No one has yet raised any issues caused by Brexit which are insurmountable so far as the historic vehicle movement is concerned. However, if problems do emerge, the Parliamentary Group will not hesitate to raise the issue with ministers.”

The subject of VAT and import duty has been hanging since before Christmas. A report from financial planner Kreston Reeves made national headlines when it predicted Brexit would damage the investment potential of classics.

New VAT rules, introduced on 1 January, mean values will still be affected, with that minimum charge of 5% VAT.

Classics are eligible for the preferential rates so long as they are: at least 30 years old; in original state or in historically correct condition; and no longer in production.

The Federation of British Historic Vehicle Clubs has faith that enthusiastic UK owners will find a way to keep enjoying their hobby

Those of less than 30 years old are generally not considered to be classic or collector’s cars, says the government advice. Exceptions can be claimed.

“It’s subjective, and it’s ultimately the HMRC that decides whether it is of historical interest or not when it comes through the borders,” admits Colin Laidlaw, director of VAT at Kreston Reeves.

Youngtimers in Europe may be less attractive to UK buyers as a result. Cars built in the EU are exempt from import duty, scrapping a potential 10% charge, and the margin scheme has been reintroduced for used cars sold into Northern Ireland, meaning no VAT will be payable.

Auction houses are slightly different, but largely covered by the same rules.

Toby Service of Brightwells expects British buyers to fill any void left by European bidders: “It will certainly cut down the European buyers for the lower-value cars,” he admits, “but most of those go to UK bidders anyway.”

Neither Bonhams nor RM Sotheby’s expects its fees to change. According to Bonhams’ group motoring chairman James Knight: “Bidders in the EU will now actually be able to enjoy a rebate on UK VAT upon proof of export.”

The thriving and supportive British classic car community is a source of hope

The overriding sense is the need for perseverance. The early problems are being encountered at a time when travel is restricted, which in a perverse twist buys time.

For many it’s a case of returning to the old days. As Roselli recalls: “I remember going to Italy with my dad when we were in the common market. We’d go in a lorry, all very exciting for a 10-year-old, and spend half a day in customs.

“They’d put a wax seal on the lock, we’d drive into France and have a policeman inspect the seal and paperwork. At Dover we’d be checked again. In the EU that all stopped. Now, with everything being electronic, I anticipated it would be similar but streamlined.”

Yet the UK’s strong and at times self-sufficient classic industry offers reassurance, and vehicle clubs may find themselves with a vital part to play.

“One of the key talents of classic owners,” concludes Scott, “is their ability to source parts and keep their cars on the road. They’ve got round far more and bigger obstacles than Brexit will throw at them. I don’t think the average owner has a lot to worry about.

“As society changes, with fewer meet-ups in person, car clubs just might be the answer. And if it turns out that there is a problem with importing parts, clubs doing group buys are ideal.

“If there’s one thing the historic community has it’s resilience, and innovation to keep our cars on the road.”

Images: Blue Passion/HERO, Getty Images, Photoclassic/Peter Auto, Julien Hergault/Peter Auto, Will Broadhead/HERO

Information correct as of January 2021

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