I'm not aware of a form 386. This form VAT 414 is the same thing by the sound of it - it asks if DUTY and VAT have been paid. ITIRIS that they charge VAT in lieu of Import Duty where this has not been paid or no proof can be given that it has, but maybe you'll get clobbered VAT AND Import Duty.
The problem now is getting proof of importation and duty paid. for example if you go into Europe and haul back an old MV on a low loader, chances are you will not be stopped at Customs so you will not have to pay any import duty, nor in all probability will you have paid any VAT.
Or what about an old U.S. MV you've just bought that has been here since the war, unregistered. Only evidence they say they will accept is letter from manufacturer (impossible in many instances) and they do not offer an alternative. means of providing evidence. Of course duty was not paid, but they're not really interested in this (unless this hobby is so big that payment of duty on restored wartime MVs can bail us out of economic decline?).
No, this is legislation designed to prevent vehicle import fraud etc, and looks like HMRC are now forcing DVLA to police this. Unfortunately we are caught up in the web with no formal 'wave-you-through we're not after you' route.
But as I say, maybe you'll be lucky and get your application dealt with by a sensible headed person