HMRC's Yen Rate Caught Up With the Market in October, and UK Import Tax Followed

HMRC’s exchange rate for the yen moved on 1 October from ¥215.6954 to ¥208.5932 to the pound. For anyone importing a Japanese car invoiced in yen, that is a 3.4% rise in the sterling value that UK duty and VAT are charged on — arriving a month after the market itself moved. On a car invoiced at ¥2,000,000, the customs value is £315.71 higher in October than it was in September.

What changed in HMRC’s yen rate on 1 October?

HMRC publishes a monthly exchange rate for every currency, used to turn a foreign-currency invoice into the sterling customs value that duty and import VAT are worked out on. The yen rate for October 2026 is 208.5932 to the pound. Fewer yen to the pound means a yen price is worth more in sterling, so the same invoice now produces a larger customs value.

Why the customs rate moved a month after the market

HMRC sets each month’s rate from the market at midday on the day before it publishes, and the rate then runs for the whole of the next calendar month. September’s rate was therefore set in August, before sterling’s fall against the yen in the first days of September.

So for most of September, buyers paying Japanese sellers were converting at around ¥208 to ¥210, while customs values were still being worked out at ¥215.70. GOV.UK’s guidance explains why that gap did not close sooner: HMRC checks its rates against commercial rates each week, and updates one mid-month only if the difference exceeds 5%. A gap of about 3.4% stays where it is until the next monthly rate.

Two more rules from the same guidance decide whether this affects you. The rate that applies is the one in force when the import entry is accepted, not when you paid. And if your contract specifies an exchange rate, that rate is normally used instead.

What it does to a ¥2,000,000 Japanese car

If the car qualifies for the 0% Japan preference, there is no duty and the only change is the VAT: £1,854.47 in September against £1,917.61 in October, a rise of £63.14. Whether a used car can claim that preference depends on evidence of its origin, which is a separate question covered in import duty on Japanese cars in the UK.

The larger number is the purchase itself. At Bank of England spot, ¥2,000,000 cost £9,228.31 on 1 September and £9,528.90 on 6 October — £300.58 more, all of it decided by the date the money moved. For how a stronger yen works against an importer more generally, see our report on Japan’s 2026 yen intervention.

Does this apply to you?

• Yes, if your car is invoiced in yen and imported into Great Britain from 1 October, with no exchange rate fixed in the contract.
• Not in the same way if the invoice is in pounds — there is nothing to convert — or if the contract fixes a rate.
• Dealers: import VAT is recoverable, so the VAT rise is a cash-flow point; the duty rise, where duty applies, is a cost.
• Private buyers: both the duty and the VAT are a cost.

Is your car still legal to import?

Yes. Nothing changes about which Japanese cars may be imported, the 10-year exemption from vehicle approval, the 14-day NOVA deadline or the DVLA’s requirements. This is a change in the value tax is charged on, not in the rules. The full process is in how to import a Japanese car to the UK.

Should you move now or wait?

We do not forecast currencies, and nobody who does can be relied on to. What can be said is mechanical: the October rate is fixed until 31 October unless the market moves more than 5% away from it, and November ’s rate will be set from the market in the second half of October. The date that matters for tax is when your import entry is accepted; the date that matters for the price is when your money is converted. A car already at sea is taxed at whichever rate is in force when it is declared.

If you are pricing a car now, you can import a Japanese car to the UK with the duty and VAT worked out at the rate in force for your car before you commit.

Is this news, or is someone selling you something?

It is a small number honestly reported. On a ¥2,000,000 car the October rate adds about £63 to £101 of tax, against a purchase price that moved by about £300 in early September. Neither is a reason to rush a decision, and anyone using a monthly customs rate to create urgency is selling you the urgency. The one thing worth acting on is the mechanism: know which rate, and which date, applies to your car before you agree a price.

Exchange rates were checked on 7 October 2026 against HMRC’s published monthly rates and the Bank of England’s daily spot series XUDLJYS; the conversion rules against GOV.UK’s guidance “Converting foreign currency amounts to include in the customs value”; duty and VAT rates against the UK Integrated Online Tariff (commodity 8703 23 90 00). Figures are worked examples, not a quote. This article does not forecast exchange rates.