HMRC guidance relating to importing goods into the UK

The Tax Kit: April 2021.

HMRC are providing guidance and updates on Brexit related issues. Please review their website for updated guidance.

https://www.gov.uk/guidance/vat-imports-acquisitions-and-purchases-from-abroad

https://www.gov.uk/import-goods-into-uk.

Postponed VAT Accounting allows you to delay the accounting of VAT on imports. Instead of having to pay the VAT on entry and then reclaim it later on your VAT Return; you can declare and claim the VAT at the same time, on the same VAT Return. This means that the requirement to pay the import VAT is postponed until the VAT Return where you can reclaim it. The resulting entries required to your VAT Return are:

Include the following amounts to the following boxes:

Box 1: VAT due on imports

Box 4: VAT reclaimed on imports

Therefore, if these values are the same, the net result will be Nil.

Box 7: Include the total value of all imported goods in with the total of all other purchases (excluding VAT).

Postponed VAT Accounting therefore avoids the negative cashflow impact of VAT on importing, i.e. of having to pay on entry and having to wait to reclaim it later on your VAT Return. It also means that the goods won’t be held-up at customs while the import VAT bill is settled.

Postponed VAT Accounting isn’t mandatory. Alternatively, a business can choose to pay import VAT on importation and reclaim the VAT on your next VAT return, subject to the normal rules for claiming input VAT and a C79 form Import VAT certificate.

Register for a GB EORI 

If you plan to import or export any goods outside the UK, your business will need to be issued with a GB EORI (Economic Operator Registration and Identification) number, (or XI for Northern Ireland).

Your EORI number must have a GB at the front. If you have an EORI but it doesn’t have a GB prefix, you’ll need to apply for a new one with a GB prefix (or XI for Northern Ireland). This GB EORI number and your VAT number will need to be included on your customs declarations.

Follow HMRC guidance on obtaining a GB EORI: https://www.gov.uk/eori.

Register with the Customs Declaration Service

The import VAT to be included in your VAT Return must be accessed on an online monthly statement. This will be available to you once registered with the HMRC Customs Declaration Service https://www.gov.uk/guidance/get-access-to-the-customs-declaration-service.

You monthly Import VAT statement must be downloaded and kept as evidence (the online portal will not keep records beyond a few months). See HMRC guidance: https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return.

The normal rules about what VAT can be reclaimed as input tax will still apply – i.e. business use, documentation, records, etc, https://www.gov.uk/reclaim-vat.

N.B. Special rules apply to trade with Northern Ireland – if that applies, please check.

Note

VAT, duty and customs rules are complex. This note is a brief introduction to help your VAT Return submission relating to the new Brexit changes and is not a full explanation. Links to some HMRC guidance has been included for further information. Obtain advice on your own specific circumstances and check whether any relevant rules have changed. Brexit rules will continue to develop over the coming months. Please review HMRC guidance for future changes.

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