Imports (VAT Notice 702)
Find out how imported goods are treated for VAT purposes, including how to work out import VAT and which goods are relieved from import VAT.
1. Overview
1.1 Information in this notice
It explains how imported goods are treated for VAT purposes.
The VAT treatment of goods entering the UK from EU territories (see section 9) is set out in The single market (VAT Notice 725) and New means of transport (VAT Notice 728).
The VAT treatment of goods imported under Customs Special Procedures under the Union Customs Code (UCC) and End Use is set out in Notice 3001: customs special procedures for the Union Customs Code.
The VAT treatment of goods imported into fiscal warehouses is set out in Fiscal warehousing (VAT Notice 702/8).
1.2 What’s changed
The email address for National Duty Repayment Centre (NDRC) enquiries has been updated at paragraph 2.5.
1.3 Who should read this notice
This notice should be read by anyone importing goods into the UK from outside the fiscal (VAT) territory of the EU. You can find out the extent of the fiscal territory in section 9.
1.4 What law covers this notice
The EU law relating to Import VAT is contained in Council Directive 2006/112/EC.
The primary UK VAT law is contained in the VAT Act 1994. The effect of section 16 of the VAT Act 1994 is that most HMRC legislation applies to import VAT except where specifically disapplied through secondary legislation.
Secondary legislation concerning import VAT is mainly contained in regulations, notably the VAT Regulations 1995 (SI/1995/2518), and orders made under the powers contained in the VAT Act 1994. Regulations 118, 119, 120 and 121 of the VAT Regulations 1995 specify the EU and HMRC legislation disapplied.
This notice is not the law. It is our view of the law and nothing in this notice takes the place of the law.
1.5 Definition of import VAT
Import VAT is the transaction tax levied on imported goods. Goods are treated as imported when:
- they arrive in the UK directly from outside the EU and are entered to free circulation in the UK or Customs Duty otherwise becomes chargeable on them
- they have been placed under one of the Customs Special Procedures listed in Notice 3001: Customs Special Procedures for the Union Customs Code
- Import Customs Procedures and the goods are being removed to free circulation in the UK or Customs Duty otherwise becomes chargeable
1.6 What is the territory of the EU
Unless otherwise qualified, the term ‘EU’ is used in this notice to refer to the VAT (fiscal) territory of the EU, which is different from the customs territory of the EU. The countries and territories, which make up the VAT (fiscal) territory of the EU, are listed in section 9.
1.7 Transactions with the Isle of Man
Goods removed from the Isle of Man to the UK are not treated as an importation provided that either of the following apply:
- any VAT due has been accounted for in the Isle of Man
- if the goods were relieved of VAT in the Isle of Man, the conditions of that relief have not been broken
1.8 Goods imported from the special territories including the Channel Islands
Section 9 lists the territories inside or outside the EU for Customs Duty and VAT purposes.
The Channel Islands and special territories listed in section 9 are part of the EU for customs purposes but are not part of the VAT territory.
If you import goods from the Channel Islands or special territories you will be liable for import VAT in the same way as you would for those imports detailed in paragraph 1.5.
1.9 Transactions with countries which join the EU
Goods received from countries joining the EU may be subject to accessionary rates of EU customs duties. Unlike goods from EU member states, therefore, some frontier formalities may remain for duty purposes. However, for VAT purposes, such goods will not be subject to the import VAT treatment described in this notice. Instead, for registered traders, the arrangements set out in The single market (VAT Notice 725) will apply. You will not have to pay import VAT at the time the goods are entered for customs purposes.
1.10 Services received from outside the EU
If you receive supplies of services from outside the EU where the place of supply is the customer’s country, for example, the UK, you may be required to account for any VAT due on them under the reverse charge provisions. You will find more information in Place of supply of services (VAT Notice 741A).
2. Importation
The Economic Operator Registration and Identification (EORI) Scheme was implemented in the UK and EU on 1 July 2009. You will require an EORI number if you import from or export to countries outside of the EU.
2.1 VAT rate at importation
VAT is charged on the importation of goods at the same rate as if the goods had been supplied in the UK.
2.2 How import VAT is charged and collected
Goods are declared to customs using form C88 Single Administrative Document (SAD) that in most cases is presented in an electronic format. Import VAT is dealt with in the same way as a Customs Duty. You can pay it outright at importation, or under the duty deferment arrangements explained in Notice 101: deferring duty, VAT and other charges which also covers Simplified Import VAT Accounting (SIVA). This is a scheme that reduces the level of financial security required to guarantee the payment of import VAT through the duty deferment system.
Traders must be authorised to operate SIVA. See Notice SIVA1: Simplified Import VAT Accounting for application details.
You should contact the Central Deferment Office to apply for, or ask questions about, deferment.
You cannot use the Cash Accounting Scheme for imported goods.
The Cash Accounting Scheme should not be confused with the Flexible Accounting Scheme (FAS). FAS may be used, by Director Trader (DTI) agents, to pay charges due on imported goods using an immediate payment method.
Details about the FAS can be found in Notice 100: customs Flexible Accounting System.
2.3 Who can reclaim import VAT as input tax
Subject to the normal rules, you can claim as input tax any import VAT you pay on goods, provided those goods are imported for the purpose of your business. Your claim must normally be made on the VAT Return for the accounting period during which the importation took place.
The normal evidence of payment of import VAT is the import VAT certificate (form C79), which is issued monthly. Section 8 gives more information about the C79, as well as the acceptable evidence for those types of importation that at present do not appear on a C79. It also explains what to do if you lose a certificate or have any queries about items missing from certificates.
If you’re partly exempt and are unsure about the amount of tax that you may reclaim, you should contact VAT: general enquiries.
2.4 Input tax for shipping or forwarding agents
If you act as a shipping or forwarding agent for an importer and pay or defer VAT on their behalf, it is a commercial arrangement between you and your principal. You cannot claim the VAT as input tax because the goods are not imported for the purpose of your business.
Although HMRC usually deals with agents in relation to the importation and clearance of goods, it is the importer’s responsibility to ensure that goods are properly entered, and that any import VAT and other charges due are paid. Only the importer has the legal right to reclaim the VAT paid on imported goods as input tax, subject to the normal conditions being met.
2.5 If you’re a shipping or forwarding agent and the importer does not pay you the import VAT
If an importer fails to pay you import VAT you paid on their behalf, your only recourse is to the importer, except where one of the following applies:
- the importer has gone into liquidation
- an administrator or administrative receiver has been appointed, who certifies that in their opinion, ordinary unsecured creditors will receive nothing in the liquidation
In such cases you may be able to recover amounts paid as tax from HMRC. All of the following conditions must be met:
- the interval between the date of the import entry for the goods and the date the importer became insolvent is no more than 6 months
- you entered the goods in accordance with instructions from the importer
- during their stay in the UK the goods were under your control and were not used
- the goods have been re-exported in the same state as they were imported
To claim repayment you should write to the NDRC at Salford, enclosing:
- evidence that the import VAT has been paid to HMRC
- a certificate from the person in charge, for example, the liquidator, that the VAT has not been, and will not be, reclaimed as input tax
- within 6 months of confirmation from the person in charge, that the importer became formally insolvent the date the entry was lodged with HMRC
- a declaration that you will not recover the relevant VAT in whole or in part from the insolvency
- evidence to satisfy HMRC that you have acted in accordance with the importer’s instructions
National Duty Repayment Centre - Salford
Ralli Quays
3 Stanley Street
Salford
M60 9HL
Telephone 03000 582 687
Fax: 03000 583027
Email: NDRC Enquiries ndrc.nch@hmrc.gsi.gov.uk
If you need any further advice you should contact VAT: general enquiries.
2.6 Claim repayment of overpaid import VAT
Method of claiming repayment of overpaid import VAT – VAT registered, non-VAT registered and non-fully taxable traders
Non-VAT registered and non-fully taxable traders can claim overpaid customs duties and import VAT (form C285).
VAT-registered traders can use form C285 to claim repayment of overpaid customs duties but must claim the equivalent of any overpaid import VAT as input tax on their VAT Return subject to the normal VAT rules.
Current Month Adjustments (CMA)
Where the overpayment of Customs Duty or import VAT is made via your deferment account, you may (regardless of your VAT status) apply to have your deferment account adjusted to reflect the correct amount of duty or import VAT. Your request for CMA must be made on form C285 and sent to the NDRC at the address quoted under paragraph 2.5.
Current month adjustments can only be made in the month that the error occurs and therefore you must make your application for adjustment before the last day of the month in which the overpayment was made.
Please ensure that you submit all supporting documents with your claim as there will be no time for further enquires to be made. If your application is received after the month end or without all supporting documentation it will be dealt with as a standard repayment. This means that if you’re a VAT-registered trader requesting the adjustment of overpaid import VAT your claim will be refused and you will have to claim the equivalent amount as input tax on your VAT Return.
Repayments to agents
If an importer fails to pay you the import VAT that you paid on their behalf, your only recourse is to the importer, except in the circumstances set out in paragraph 2.5. If you need any further advice please contact the NDRC.
2.7 Non-UK traders with a UK establishment and their agents
Appoint an agent to import and supply goods
You can arrange for an agent who is resident in the UK, and who is registered for VAT purposes, to import and supply goods on your behalf if you:
- import goods for onward supply in the UK
- do not supply any other supplies in the UK
If you do this, you will not need to register for VAT in the UK. You must agree with the agent that they will issue proper tax invoices for the supplies of the goods.
If you adopt this arrangement the place of supply of your agent’s supply of services to you may be where you belong, or where the underlying supply of the goods is made. See VAT Place of supply of services (VAT Notice 741A).
Responsibilities of the UK agent
If you act as an agent for a non-UK trader under the arrangement, you will be treated as importing and supplying the goods as the principal. You must make any necessary customs entries as importer, pay or defer the VAT and take delivery of the goods. You can reclaim the import VAT as input tax, subject to the normal rules, but you must treat the transactions as a supply by you and charge and account for VAT on the onward sale in the normal way.
The place of supply of your services to the non-UK trader may be supplied where the non-UK trader belongs or where the underlying supply of the goods is made. See VAT Place of supply of services (VAT Notice 741A).
Register for VAT in the UK
If you do not wish to use the arrangements, but you make taxable supplies in the UK, you will have to register for VAT here. There’s more information about the liability to register for UK VAT in VAT Notice 700/1: should I be registered for VAT?
You may choose one of 3 options. You may:
- appoint a tax representative to deal with your tax affairs
- appoint an agent to deal with your tax affairs
- deal with your VAT obligations yourself
You will find more information in sections 9 to 11 of VAT Notice 700/1: should I be registered for VAT? and The single market (VAT Notice 725).
2.8 Non-UK traders without a UK establishment and their agents
Appoint an agent to import and supply goods
You can arrange for an agent who is resident in the UK, and who is registered for VAT purposes, to import and supply goods on your behalf if you:
- import goods for onward supply in the UK
- do not make any other taxable supplies in the UK
If you do this, you will not need to register for VAT in the UK. You must agree with the agent that they will issue proper tax invoices for the supplies of the goods.
If you adopt this arrangement the place of supply of your agent’s supply of services to you may be where you belong, or where the underlying supply of the goods is made. See VAT Place of supply of services (VAT Notice 741A).
Responsibilities of the UK agent
If you act as an agent for a non-UK trader under the arrangement, you will be treated as importing and supplying the goods as the principal. You must make any necessary customs entries as importer, pay or defer the VAT and take delivery of the goods. You can reclaim the import VAT as input tax, subject to the normal rules, but you must treat the transactions as a supply by you and charge and account for VAT on the onward sale in the normal way.
The place of supply of your services to the non-UK trader may be supplied where the non-UK trader belongs or where the underlying supply of the goods is made. See VAT Place of supply of services (VAT Notice 741A).
Register for VAT in the UK
If you do not wish to use the arrangements, but you make taxable supplies in the UK, you will have to register for VAT here. There’s more information about the liability to register for UK VAT in VAT Notice 700/1: should I be registered for VAT??
You may choose one of 3 options. You may:
- appoint a tax representative to deal with your tax affairs
- appoint an agent to deal with your tax affairs
- deal with your VAT obligations yourself
2.9 Goods not wholly owned by the importer
If you import goods that belong wholly or partly to another person, and the goods are to be used for your own or any other person’s private purposes, you cannot recover the import VAT paid as input tax. This situation will arise, for example, if a VAT-registered marine repair trader imports a privately owned yacht for repair, where the yacht is to be used after repair for private purposes.
If such treatment results in VAT being charged twice, you should apply to your local VAT office for a repayment. You should write giving full details of the goods and the reasons for your claim. You should enclose the VAT copy of the customs declaration or a copy of the import VAT certificate (form C79) and a copy of any sales invoice for the goods.
2.10 Goods lost or destroyed
Where imported goods are lost or destroyed before they are released from official control, you can apply to HMRC at the place where the import entry was presented for repayment or remission of the import VAT paid or due (form C285) (see paragraph 2.6). Where imported goods are lost or destroyed after release from official control, you can deduct the VAT paid as input tax, subject to the normal rules, provided the goods were to be used for the purposes of your business.
You need not account for output tax unless you supplied the goods to someone else before the loss or destruction occurred. You will find more about this in VAT guide (VAT Notice 700).
2.11 Goods supplied before delivery of an import entry
You should zero rate the supply if:
- you make a supply of imported goods between the time of their arrival in the UK and the time when an import entry is delivered to HMRC
- the new owner of the goods is required to make the import entry
2.12 When the precise amount of duty is not known
When the precise amount of import duty due cannot be assessed at the time the declaration is presented, release of the goods can usually be allowed on payment of a deposit or the provision of security to cover the amount of duty considered to be in dispute (see Notice 252: valuation of imported goods for customs purposes, VAT and trade statistics).
If you’re VAT registered you may pay the import VAT outright, based on the value for VAT that includes the highest potential duty amount. An import VAT certificate (form C79) will be issued and you can claim repayment on your VAT Return under the normal rules.
Alternatively, you may provide security for the disputed amount of VAT. However, you should be aware that this might not be to your advantage. If you choose to secure the disputed element of VAT, a C79 will not be issued until after the duty amount has been adjusted. The adjustment may not take place until some weeks after the deposit has been made, depending on how long it takes you or your agent to produce the necessary evidence. Input tax recovery may be delayed accordingly.
If you’re not VAT registered you must secure the amount of VAT in dispute.
3. Valuation of imported goods for VAT purposes
3.1 Value for import VAT
How to work out the value of imported goods for VAT
The value for VAT of imported goods is their customs value, determined according to the customs rules described in Notice 252: valuation of imported goods for customs purposes, VAT and trade statistics, plus, if not already included in the price:
- all incidental expenses such as commission, packing, transport and insurance costs incurred up to the goods’ first destination in the UK
- all such incidental expenses where they result from transport to a further place of destination in the EU if that place is known at the time of importation
- any Customs Duty or levy payable on importation into the UK
- any Excise Duty or other charges payable on importation into the UK (except the VAT itself)
Some goods are entitled to a reduced valuation at import. See paragraph 3.4 for details.
Incidental expenses
In addition to the examples (such as transport), the term ‘incidental expenses’ also covers such items as customs clearance charges, quay rent, entry fees, demurrage, handling, loading and storage costs. Generally, where supplies of services qualify for zero rating because they are supplied in connection with an importation of goods, the cost of those services should be included in the value for import VAT.
Certain costs, for example, royalties and licence fees, buying commissions, should not be included in the value for import VAT as they are taxable under the reverse charge or international service arrangements (see VAT Place of supply of services (VAT Notice 741A)).
First destination
‘First destination’ is the place mentioned on the consignment note or any other commercial document relating to the imported goods. In the absence of such documentation, it means the place of the first transfer of the goods in the UK.
Further destination
If a further destination in the UK or an EU member state is known at the time the goods are imported, costs relating to the transport of the goods to that place must be included in the import VAT value.
Calculation of the amount for incidental expenses
The following 3 methods may be used to calculate the ‘incidental expenses’ element of the import VAT value. The first method requires actual costs to be declared, whilst methods 2 and 3 provide ways of estimating the incidental expenses. Use of the 3 methods is non-hierarchical and individual importers or agents may use whichever method best suits their particular circumstances.
Method 1
This method requires the actual costs to be declared at the time the goods are imported. The time of importation is the time when the customs debt is incurred or would have been incurred if the goods were subject to duty. In cases where the costs are later found to be incorrect (for example, if additional storage costs are incurred) the amounts paid will need to be adjusted after importation.
Method 2
The following nationally agreed rates may be used to estimate the incidental expenses to be included in the import VAT value. The rates are intended only for international movements of goods, which terminate in the UK, and represent average costs of handling, storage, customs declarations and transport to destination.
Values for other consignments, including those destined for delivery in member states, should be based on methods 1 or 3. If importers or agents use the method 2 rates, post importation adjustments are not required.
Additionally, where it’s found that the amount of import VAT based on actual costs exceeds the amount declared on the basis of method 2 rates, HMRC will not seek to collect the arrears of import VAT unless the importer concerned is not registered for VAT, or if registered, is restricted in the amount of import VAT that can be claimed as input tax.
| Group | Rates |
|---|---|
| Group A – airfreight | 40p per chargeable kilo or a minimum amount of £100 to be added to the value at the time of importation, whichever is the greater |
| Group B – Surface freight groupage, consolidation consignments by trailer, rail wagon or container | Delivery and handling combination of £90 per gross weight tonne plus a flat ‘other ancillaries’ rate of £80 per consignment, minimum £170, to be added to the value at the time of importation |
| Group C – Surface freight full load consignments by trailer, rail wagon or container | £550 per full load consignment to be added to the value at the time of importation |
Method 3
In cases where methods 1 and 2 are considered inappropriate or impractical to use, individual agreements may be negotiated with the office where the transaction was entered, or with the importers local customs office. Importers or agents interested in this method, who are uncertain about which office to approach should contact VAT: general enquiries. Once a method 3 rate is used, post importation adjustments are not required.
3.2 How CHIEF calculates import VAT
HMRC data processing system Customs Handling of Import and Export Freight (CHIEF), which is to be replaced in the future by the Customs Declaration Service (CDS), calculates the value for VAT by adding any duties, levies and additional costs to be included in the VAT value to the value declared in box 22 of the import declaration (the SAD). Where any of these additional costs, which need to be included in the VAT value, are not included in the total invoice value (box 22) or the other value build-up boxes (63 to 67), you must declare them in the Adjustment for import VAT value box (68).
If the value for VAT is less than that which CHIEF would normally calculate for Customs Duty purposes, you must calculate the amount of VAT payable manually. Except at manual locations, you must enter the code ‘VAT’ in the Rate column of box 47. You must enter the calculated payment in the amount column.
3.3 Value declaration
If goods are liable to ad valorem Customs Duty (that is, a duty chargeable on the basis of value), a declaration on form C105 (Valuation declaration) made for duty purposes, will also generally be acceptable for VAT. However, the declaration will only provide information which helps determine the customs value of the goods, and it should not be regarded as establishing their full value for VAT purposes (see paragraph 3.1).
Where goods are not liable to ad valorem duty but are liable to VAT at the standard rate, a valuation declaration for import VAT is only to be completed when requested by customs and the value exceeds £6,500 and the importer is not registered for VAT or if the importer is registered for VAT:
- the goods are not for the purpose of the business
- deduction of input tax would not be allowed
- the value of the goods is not being determined under customs valuation method 1 (see Notice 252: valuation of imported goods for customs purposes, VAT and trade statistics)
There are no arrangements for registering a General Valuation Statement for VAT only entries. Individual valuation declarations must be submitted where necessary.
Whether or not a valuation declaration is required for the goods, evidence of value must be produced. Acceptable evidence is a copy of the seller’s invoice or other document against which payment will be made. This will include telex or similar messages used instead of invoices.
Further information on valuation declarations is given in Notice 252: valuation of imported goods for customs purposes, VAT and trade statistics.
3.4 Imported works of art, antiques and collectors’ items
Certain works of art, antiques and collectors’ items are entitled to a reduced valuation at importation. This is reached by calculating a value for duty using the appropriate duty method, adding any additional costs (see paragraph 3.1) and multiplying the total by 25%. Applying the 20% rate to this value gives an effective VAT rate of 5%.
3.5 Works of art, antiques and collectors’ items that are eligible for the reduced valuation
Section 11 contains definitions of the works of art, antiques and collectors’ items that will be eligible for the reduced valuation.
You can find details of the entry procedure in UK Trade Tariff. The following Customs Procedure Codes (CPCs) apply:
- 40 00 200 (imports from third countries)
- 49 00 029 (imports from special territories)
Previously exported works of art, antiques and collectors’ items
An imported work of art, antique or collectors’ item, as defined in section 11, will be eligible for the reduced rate provided that it had not been exported from the UK less than 12 months before the date of importation.
You can find details of the declaration procedure in UK Trade Tariff. The following CPCs apply:
- 61 00 F03/4 (from third countries)
- 49 23 F01, 49 00 F03/4 (from special territories)
Further details can be found in The Margin and Global Accounting Scheme (VAT Notice 718) and the UK Trade Tariff, Volume 3.
3.6 Auctioneer’s commissions in valuing goods for import VAT purposes
As explained in paragraph 3.1, commissions connected with an importation of goods are normally included as part of the overall value of goods for import VAT purposes. However this general rule no longer applies in respect of certain imports of works of art, antiques and collector’s pieces.
Where works of art, antiques and collector’s pieces are temporarily admitted into the UK and sold by auction while subject to the Temporary Admission (TA) regime, the auctioneer will charge commission to the buyer. This commission is known as buyer’s premium. Where auctioned goods have been removed from TA and finally imported into the UK the buyer’s premium has always been included in the value of the goods for import VAT purposes.
However, because the goods attract an effective reduced rate of VAT (equivalent to 5%), the premium was also taxed at this effective reduced rate. The European Court of Justice has ruled that the commission should be taxed at the standard rate of VAT and the UK has therefore introduced the following arrangement with effect from 1 September 2006.
From this date buyer’s premium is not to be included in the value for import VAT purposes of works of art, antiques and collectors’ items sold at auction under TA and subsequently finally imported into the UK. This is because arrangements have been made for the commission to be taxed under the normal rules as a standard-rated domestic supply. Auctioneers should consult the Auctioneers’ Scheme (VAT Notice 718/2) for further details of the new arrangements.
4. Import entry procedure
You will find details of the declaration procedure in UK Trade Tariff Volume 3.
The following paragraphs give particular information about the import VAT aspects.
4.1 Normal procedure
Unless the goods are placed under Excise warehousing or one of the Customs Special Procedures listed in Notice 3001: Customs Special Procedures for the Union Customs Code, the payment of the import VAT due must normally be made either at the time of importation, or be deferred together with any duty due, provided you or your agent are approved to use the deferment scheme (see paragraph 2.2).
As an alternative to deferring the payment of all the import charges on an entry to either the importer’s or the agent’s deferment account, payment of the VAT may be deferred to the importer’s account and all other charges to the agent’s. UK Trade Tariff Volume 3 explains how to do this.
Further information can also be found in Notice 101: deferring duty, VAT and other charges.
The import entry must be presented at the National Clearance Hub (NCH). If the consignment is covered by a single commodity code for customs purposes, but includes goods liable to VAT at both the standard and zero rate (such as clothing for adults and children), the importer or agent must complete a separate item on the entry for the goods liable to each rate of VAT. Special rules apply to the completion of the tax lines in the calculation of taxes box (box 47) depending on whether the entry is presented at a manual or customs computerised location.
4.2 Amendment of the declaration
Where an amendment of the declaration is made after the goods have been released out of official charge and this results in less import VAT being payable than was originally declared and paid, you can reclaim the higher amount of tax as input tax in the normal way. You can also use the procedure described in paragraph 2.6. Where amendment of a declaration results in more import VAT being payable, you must submit the additional payment, and a completed form C18 to the NCH office. The additional payment will appear on the import VAT certificate (form C79), which is the official evidence for input tax deduction (see section 8).
C18 Team
NCH
HMRC
Ralli Quays
3 Stanley Street
Salford
M60 9HL
4.3 Postal imports
Consignments not exceeding £873 in value
If you’re registered for VAT and are importing goods in the course of your business Royal Mail or Parcelforce will ask you for payment of VAT when the package is delivered. You must keep the charge label which was attached to the package to support any claim to input tax.
To support your claim to import tax you should keep the charge label, postal wrapper and any customs declaration (that is, form CN22 or form CN23) that was attached to the package.
Consignments over £873 entered to home use and free circulation
For postal imports with a value greater than £873 you must lodge a declaration on form C88 SAD which will be sent to you for completion. You should return it to customs with an invoice and/or other acceptable evidence of the value of the goods. You will have to pay the import VAT and any other charges due at importation before the goods can be released to you. This may be done by use of your deferment account if you’re approved to do so. After payment you will be sent a copy of the declaration to support any claim to input tax deduction.
For further information regarding postal imports you should refer to Notice 143: a guide for international post users and Notice 144: trade imports by post - how to complete customs documents.
4.4 Goods imported from outside the EU which are destined for an EU member state
If you import goods from outside the EU which are then consigned to a destination in an EU member state you must normally either:
- put the goods into free circulation in the UK, through the payment of any Customs Duty and, or import VAT due
- place the goods under the external Community Transit arrangements, in which case any duty and, or import VAT will be payable in the EU member state of destination – see European Commission Transit Manual, and the UK Supplement to the Transit Manual for further information on the community transit procedure
In short, you will not normally be able to put goods into free circulation in one EU member state and pay import VAT in another. However, you may wish to take advantage of a VAT relief for goods you import and put into free circulation in the course of a zero-rated supply of those goods to a taxable person in another member state (see Import VAT relief for goods supplied onward to another country in the EC (VAT Notice 702/7).
4.5 ATA carnets
An ATA carnet is an international customs document that simplifies the customs formalities for goods temporarily imported or exported.
Further information can be found in Notice 104 ATA and CPD Carnets and Notice 3001: customs special procedures for the Union Customs Code.
4.6 Goods imported under temporary admission
TA enables you to obtain relief from import VAT and customs duties on a range of goods temporarily admitted for use from outside the UK or EU, provided that they are intended for re-export after use (in most cases use can be for up to a maximum of 2 years).
Further information can be found in Notice 3001: Customs Special Procedures for the Union Customs Code.
5. Relief from import VAT
5.1 Imports to free circulation without payment of import VAT
Subject to certain conditions, you can import some types of goods without payment of import VAT. The VAT relief follows the Customs Duty relief’s that are explained in the notices listed.
| Notice no |
|---|
| 317 Imports by charities free of duty and VAT |
| 340 Importing scientific instruments free of duty and VAT |
| 341 Importing donated medical equipment free of duty and VAT |
| 342 Importing miscellaneous documents and other related articles free of duty and VAT |
| 343 Importing capital goods free of duty and VAT |
| 361 Importing museum and gallery exhibits free of duty and VAT |
| 364 Importing decorations and awards free of duty and VAT |
| 365 Animals for scientific research free of duty and VAT |
| 366 Importing biological and chemical substances for research free of duty and VAT |
| 368 Importing inherited goods free of duty and VAT |
| 369 Importing blood grouping, tissue typing and certain therapeutic substances free of duty and VAT |
| 371 Importing goods for disabled people free of duty and VAT |
| 372 Importing commercial samples free of duty and VAT |
| 373 Importing visual and auditory materials free of duty and VAT |
| 374 Importing goods for test free of duty and VAT |
5.2 Goods under a customs suspensive arrangement
If you import goods from outside the EU, and place them under one of the Customs Special Procedures listed in Notice 3001: Customs Special Procedures for the Union Customs Code, the importation for VAT purposes is not regarded as having taken place until you declare the goods for free circulation in the UK. Import VAT is then chargeable. All the conditions applicable to the appropriate Customs Duty procedure, including the declaration and provision of entry, security and so on, will apply for VAT purposes, even where import VAT is the only charge due.
You can move goods from one special procedure to another, for example, from customs warehousing to Inward Processing suspension, without payment of import VAT.
However, for goods entered to End-Use relief (other than Shipwork End Use), TA with partial relief or Outward Processing Relief you must pay the import VAT at the time of importation.
Further information is contained in Notice 3001: Customs Special Procedures for the Union Customs Code.
5.3 Re-importation of goods temporarily exported for process or repair
If you re-import goods that were temporarily exported outside the UK or EU territory for repair, service, making up or processing see Notice 3001: Customs Special Procedures for the Union Customs Code.
5.4 Goods re-imported in the same state
If you re-import your own goods in the same state as they were exported, you need not pay import VAT provided:
- the goods were last exported from the UK or EU by you
- the goods meet conditions 2-5 in the checklist for Customs Duty Returned Goods Relief in section 5 of Notice 236: Returned Goods Relief
- any import VAT chargeable on the goods was accounted for or paid and neither has been, nor will be reclaimed
- the goods were not exported with a view to avoiding or abusing the normal VAT supply rules by using Returned Goods Relief
This relief is intended primarily to avoid import VAT having to be paid and reclaimed, perhaps several times, for example, on goods taken outside the UK or EU on approval and brought back to the UK unsold or on tools and equipment returned to the UK after use outside the EU.
There are various returned goods reliefs, each of which has its set of limiting conditions, and in certain circumstances you may have a choice of more than one. A complete list of returned goods relief CPCs detailing the type of procedure for which goods may be entered can be found in UK Trade Tariff Volume 3. You will find details of the entry procedures for claiming relief on reimported goods in Notice 236: Returned Goods Relief.
5.5 More information about import VAT reliefs
Import VAT reliefs are described fully in UK Trade Tariff Volume 3. The main VAT reliefs fall within the following CPC headings:
| CPC heading | Code |
|---|---|
| Temporary Admission | 53 |
| Inward Processing | 51 |
| Conditional (free circulation import) reliefs | 40 |
| Returned goods | 61 |
| Outward Processing | 61 |
| Zero-rated onward supplies | 42 |
6. Unregistered persons
Unless otherwise indicated in this, or other sections, all the procedures in this notice also apply to unregistered persons.
6.1 Goods imported for business purposes
You must declare goods on importation and pay or defer the import VAT in the same way as anyone who is registered for VAT. However, as you’re not entitled to reclaim the import VAT you pay as input tax, you do not receive an import VAT certificate (C79 – see section 8). However you can claim import VAT paid on goods when:
- VAT was overpaid at importation, you should make a written request on form C285 Apply for repayment or remission of import duties as explained in paragraph 2.6 for direct repayment through the duty adjustment system
- the goods are not what you ordered or are otherwise not in accordance with contract, you will find details of the procedure you must follow in refunds and waivers on customs debt
6.2 Goods imported for non-business purposes
You do not have to complete a declaration on form C88 SAD unless you’re importing the goods as freight, you’re claiming one of the reliefs listed in paragraph 5.1 or you’re claiming an exemption. If these reliefs are not applicable, you can only claim any import VAT paid in the circumstances explained in paragraph 6.1.
6.3 Personal reliefs
As well as the reliefs described in paragraph 5.4 and some of the reliefs described in paragraph 5.1, you can also claim relief from import VAT on specific categories of goods. These reliefs are explained in:
- Notice 3 Bringing your belongings, pets and private motor vehicles to UK from outside the EU
- Notice 8 Sailing your pleasure craft to and from the UK
7. Importing computer software
7.1 Work out the customs value
The customs value of imported software has to be determined according to the normal valuation rules. Where the customs value is declared on the basis of the transaction value, under Articles 70, 71, 72 of Regulation (EU) No 952/2013, the value should be based on the price actually paid or payable for both the carrier medium and the data and instructions (the software) on it.
For customs valuation purposes, no distinction is made between normalised or specific software.
7.2 ‘Normalised’ software
Products containing ‘normalised’ software are mass produced items which are freely available to all customers and usable by them independently after installation and limited training in a standard form to carry out the same applications or functions. They are made up of a coherent set of programs and support material and often include the service of installation, training and maintenance. Personal computer software, home computer software and game packages are in this category. Also included are standard packages adapted at the supplier’s instigation to include security or similar devices.
7.3 Normalised software supplied free of charge
If the software is supplied to you free of charge, for example in an inter-company transaction, you will pay VAT on the value in accordance with the valuation rules in paragraph 3.1.
7.4 ‘Specific’ software
‘Specific’ products are:
- items made to customers’ special requirements, either as unique programs or adaptations from standard programs
- inter-company information data and accounts
- enhancements and updates of existing ‘specific’ programs
- enhancements and updates of existing ‘normalised’ programs supplied under contractual obligation to customers who have bought the original program
7.5 The basis of the value for import VAT
Under Section 21 (1) of the VAT Act 1994, the value of imported goods shall be determined according to the rules applicable in the case of Community Customs duties (see paragraph 7.1).
For a full description of Place of Supply of services see Place of supply of services (VAT Notice 741A).
For:
- normalised software – import VAT is due on the customs value of the software, for example, the total value of the carrier medium and the data and instructions (the software) on it, adjusted where appropriate in accordance with Section 21 (2) of the VAT Act 1994
- specific software – no import VAT is due, the total amount of the value of both software and carrier medium is treated as the consideration for the supply of services and is taxed accordingly within the member state concerned
7.6 Transmission and provision of information by satellite, phone, telex, fax
The transmission and provision of information by satellite, phone, telex, facsimile and so on, is treated as a service. You will find more information on this in Place of supply of services (VAT Notice 741A).
8. Import VAT certificate (C79)
(Referred to in paragraphs 2.3, 4.2 and 6.1.)
8.1 What this section is about
This section explains the current arrangements for the issue of evidence that import VAT has been paid.
8.2 What an import VAT certificate is
You need to hold official evidence of VAT paid on imported goods before you can recover the VAT as input tax. The normal evidence is the monthly certificate, known as form C79. It does not in itself allow you to claim back the VAT you have paid which must, in all cases, be deductible under the normal input tax rules.
We send the certificates (form C79) to the VAT, EORI-registered person whose VAT registration number is shown in box 8 of the import declaration. You must take great care to use the correct EORI number. If not, the VAT you have paid may not appear on your certificate and may even end up on another person’s certificate. Similarly, you may find someone else’s import VAT on your certificate.
We will take action against agents, importers who persistently quote incorrect EORI numbers. This may include prosecution.
8.3 What the certificate covers
The C79 certificate is issued in connection with most import procedures, and also post importation corrections and removals from a customs warehouse. These are listed in paragraph 8.15. There are some types of importation that do not appear on the certificate. These are listed in paragraph 8.16 together with the acceptable evidence of payment shown against each type.
8.4 What the C79 certificate looks like and what information is on it
The certificate is made up of twin sided A4 sheets with a blue print background. A specimen of the format of a certificate is reproduced in paragraph 8.5.
Flexible Accounting System (FAS) paid VAT transactions will be shown under your EORI number.
Neither the agent’s VAT number nor the agent’s reference number appears on the certificate for immediate payment and FAS paid transactions. If this causes you particular difficulties you may wish to consider arranging duty deferment facilities.
The accounting date will be shown against each item on the certificate, and transactions will appear on the certificate for the month covering that accounting date – for example, transactions bearing an accounting date of October will normally appear on the October C79 certificates. For transactions paid by duty deferment the accounting date is normally the date of clearance of the goods. For immediate payment and FAS items the accounting date may, in some instances, be later than the date of the declaration. So some goods cleared in late October may have a November accounting date, and will therefore appear on the November certificate.
Transactions that are the subject of an accounting query will appear on the first certificate issued after the query has been dealt with.
A single total of VAT for the period will appear at the end of the final page.
8.5 Example of a certificate
(Referred to in paragraph 8.4.)
You must keep this certificate to support your claim to input tax.
8.6 When you should receive a C79 certificate
Certificates cover accounting transactions made in each calendar month should be received around the 24th of each month following imports logged the previous month. For example, October certificates (certificates covering transactions with accounting dates in October) should be received on or about the 24 November. We post the certificates direct to your address as shown on the main VAT register. This means that, for VAT group registrations, a single certificate is issued to the address of the representative member of the group. Certificates cannot be sent to an address other than that on the main VAT register.
8.7 How to use the C79 certificate
The original certificate or customs issued replacement is the prime evidence for claiming input tax deduction. However, you may copy and distribute certificates as required for internal accounting purposes. We will also allow a self-accounting branch to use a photocopy of the certificate as an accounting document for the purpose of input tax deduction, provided the original is made available for inspection if requested by the control officer.
The date when the VAT shown on the certificate may be treated as input tax is normally the accounting date alongside each item, not the date when the certificate is issued. So, for example, if your VAT Return period ends 31 October, you may treat as input tax for that period, subject to the normal rules, VAT paid shown on your October certificate (issued 12 November).
If you have non-standard tax periods and the issue date of the 12th of the month causes you difficulties, you can ask HMRC for permission to estimate input tax.
8.8 Health authorities and government departments
We do not issue certificates to health authorities and government departments whose EORIs begin with HA or GD.
When VAT is paid at the point of importation and the authority or department is entitled to input tax deduction, a HMRC authenticated copy of the declaration will be issued as evidence.
8.9 Negative amounts on certificates
Negative amounts may appear on your certificate. These are either repayments of import VAT or corrections of errors.
8.10 Lost or missing certificates
We keep for a period of 6 years, microfiche copies of all monthly certificates issued. You can get replacements of lost or missing certificates from:
HMRC
VAT Central Unit Microfilm Section
8th Floor
Alexander House
Victoria Avenue
Southend-on-Sea
SS99 1AU
You need to request them in writing, by faxing your request to fax number 03000 594271 on business headed paper, quoting your VAT registration number and the months for which replacement is required. Replacement certificates will be issued to your VAT-registered address. Duplicates take approximately 2 to 3 weeks to issue.
Before you request replacement certificates, you need to be sure that a certificate should have been issued (see paragraph 8.6).
VAT Central Unit Microfilm Section cannot answer general queries about certificates. You should contact VAT: general enquiries.
If there is not enough time for you to get a replacement certificate before your VAT Return is due, contact HMRC to arrange use of alternative evidence or estimation of input tax.
8.11 Newly-registered traders
If you’re newly registered for VAT you will need to apply for an EORI number.
8.12 Queries about additional items on certificates
Paragraph 8.2 explains how someone else’s import VAT can appear on your certificate. If you discover such an item you must not deduct as input tax the amount shown. If you or the agent who made the import declaration later corrects the error, a negative amount will appear on your next certificate. If you have already wrongly deducted the VAT shown, you must show the negative amount as a credit on the VAT deductible side of your account. This will reduce the amount of input tax you’re able to claim in that period.
8.13 Queries about items missing from certificates
If you consider that any VAT amounts paid or deferred are missing from a certificate ask yourself:
- could the item be outside the scope of the certificate? (paragraph 8.16 explains which imports do not appear on certificates), where this is so, you will receive the form of evidence listed
- am I newly registered? - if ‘yes’ follow the action in paragraph 8.11
- is the item likely to have an accounting date within the month covered by the certificate? – if ‘no’ wait for the item to appear on your next certificate (see paragraph 8.4)
If none of these explanations apply, you or your agent may have entered your EORI number incorrectly on the entry and you should contact the centralised processing unit dealing with post-clearance non-revenue amendments. Their address is:
Custom House
Post Clearance Amendments
Ralli Quays
3 Stanley Street
Salford
M60 9HL
Telephone: 0300 322 7066
Email: belfast.pcateam@hmrc.gsi.gov.uk
However where there is a revenue implication you should contact the centralised processing unit dealing with such matters. Their address and telephone is the same as above.
8.14 Further help or advice
If you need further help or advice on the C79 certificate system you should contact VAT: general enquiries.
8.15 Importations which appear on the certificate
(Referred to in paragraph 8.3.)
| Import procedure | Previous evidence for input tax deduction |
|---|---|
| A: Air/sea imports | |
| The Single Administrative Document (SAD) | |
| Manually processed | SAD – authenticated copy 8 |
| Trader input/computer processed | Weekly VAT certificate issued by customs computer report TW-AH or TW-BH |
| Input/computer processed | Weekly VAT certificate issued by customs computer report TW-AH or TW-BH |
| B: Post entry correction | Form C18 |
| C: Removals from warehouse | |
| Customs warehouse | Form C259 – authenticated copy 4 |
| Excise | Duty payment Form W5, W6 or W20 or Duty deferment Form W5D, W6D or W20D |
| Hydrocarbon oils | Duty payment W50, Duty deferment VAT 908 |
8.16 Importations which do not appear on the certificate
(Referred to in paragraph 8.3.)
| Import procedure | Previous evidence for input tax deduction |
|---|---|
| A: Air/sea imports | |
| Bulked entries – Single Administrative Document (SAD) | Customs authenticated invoices |
| Registered consignees | Customs authenticated invoices |
| B: Postal imports | |
| Exceeding £873 – SAD | SAD – authenticated copy 8 |
| Not exceeding £873 (Customs declaration form – CN22/CN23 | No input tax evidence issued. Importers must retain evidence of payment of import charges by retaining the customs charge label and declaration that is on the front of the parcel. |
9. VAT territory of the EU
(Referred to in paragraphs 1.1, 1.6 and 7.3.)
VAT territory of the EU
| State | including | but excluding |
|---|---|---|
| Austria | Jungholtz and Mittelberg | |
| Belgium | ||
| Bulgaria | ||
| Croatia | ||
| Cyprus | the British Sovereign Base Areas of Akrotiri and Dhekelia, | the United Nations buffer zone and the part of Cyprus to the north of the buffer zone, where the Republic of Cyprus does not exercise effective control |
| Czech Republic | ||
| Denmark | the Faroe Islands, and Greenland | |
| Estonia | ||
| Hungary | ||
| Finland | the Åland Islands | |
| France | Monaco | Martinique, French Guiana,Guadeloupe, Reunion, Mayotte and Saint-Martin (French Republic) |
| Germany | the island of Heligoland, and Büsingen | |
| Greece | Mount Athos (also known as Agion Oros) | |
| Ireland | ||
| Italy | Campione d’Italia, the Italian Waters of Lake Lugano and Lvigno | |
| Latvia | ||
| Lithuania | ||
| Luxembourg | ||
| Malta | ||
| Netherlands | Antilles | |
| Poland | ||
| Portugal | the Azores, and Madeira | |
| Romania | ||
| Slovakia | ||
| Slovenia | ||
| Spain | the Balearic Islands | the Canary Islands, Ceuta, and Melilla |
| Sweden | ||
| United Kingdom | the Isle of Man | the Channel Islands, and Gibraltar |
Goods entering the UK from the ‘special territories’ will, for VAT purposes, be treated as imported goods.
Liechtenstein, the Vatican City, Andorra and San Marino are not within the EU for VAT purposes.
10. Customs Special Procedures
(Referred to in paragraphs 4.1 and 5.2.)
Details of Customs Special Procedures are now contained in Notice 3001 Special Procedures for the Union Customs Code.
11. Definition of articles which are eligible for importation at a reduced valuation giving an effective VAT rate of 5%
(Referred to in paragraph 3.5.)
This section applies only to VAT.
11.1 Works of art
Works of art include:
- pictures, collages and similar decorative plaques, paintings and drawings, executed entirely by hand by the artist, other than plans and drawings for architectural, engineering, industrial, commercial, topographical or similar purposes, hand-decorated manufactured articles, theatrical scenery, studio back cloths or the like of painted canvas (Tariff heading 9701)
- original engravings, prints and lithographs, being impressions produced in limited numbers directly in black and white or in colour of one or several plates executed entirely by hand by the artist, irrespective of the process or of the material employed by the artist, but not including any mechanical or photomechanical process (Tariff code 9702 00 00)
- original sculptures and statuary, in any material, provided that they are executed entirely by the artist, sculpture casts (Tariff code 9703 00 00), see The Margin and Global Accounting Scheme (VAT Notice 718), for the definition of sculpture casts
- tapestries (Tariff code 5805 00 00) and wall textiles, made by hand from original designs provided by artists, provided that there are not more than 8 copies of each
- individual pieces of ceramics executed entirely by the artist and signed by the artist
- enamels on copper, executed entirely by hand, limited to 8 numbered copies bearing the signature of the artist or the studio, excluding articles of jewellery and goldsmiths’ and silversmiths’ wares
- photographs taken by the artist, printed by the artist or under their supervision, signed and numbered and limited to 30 copies, all sizes and mounts included
11.2 Antiques
Objects other than works of art or collectors’ items, which are more than 100 years old (Tariff code 9706 00 00).
11.3 Collectors’ items
Postage or revenue stamps, postmarks, first-day covers, pre-stamped stationery and the like, franked or if unfranked not being of legal tender and not being intended for use as legal tender (Tariff code 9704 00 00)
Collections and collectors’ pieces of zoological, botanical, mineralogical, anatomical, historical, archaeological, palaeontological, ethnographic or numismatic interest (Tariff code 9705 00 00).
11.4 Items of historical significance
An article which is not 100 years old may be eligible for the scheme under this heading if it is of historical significance because of its uniqueness, or by having a direct association with an historical person or event, or is a rare example marking an important change in technical or artistic development in a particular field. Items, which were mass-produced or are merely the products of a bygone age, are unlikely to be eligible.
The list of examples shown is by no means exhaustive but gives general guidelines on the types of article eligible under this heading.
Postage stamps: issued by a country to mark its independence.
Motor vehicles
Motor vehicles which:
- possess a certain scarcity value
- are not normally used for their original purpose
- are the subject of transactions outside the normal trade in similar utility vehicles
- are of high value
- illustrate a significant step in the evolution of human achievements or a period of that evolution
As a motor vehicle is basically a utility article with a relatively short life, and subject to constant technical development, then the preconditions underlying the judgements, in so far as they are not obviously contradicted by the facts, can be taken to apply to:
- vehicles in their original state
- without substantial changes to the chassis, steering or breaking system, engine and so on
- at least 30 years old and of a model or type which is no longer in production
Also included as collectors’ pieces of historical interest are:
- motor vehicles, irrespective of their date of manufacture, which can be proved to have been used in the course of an historic event
- motor-racing vehicles, which can be proved to be designed, built and used solely for competition and have scored significant sporting successes at prestigious national or international events
The notes and criteria also apply to motorcycles.
If you wish to import a vehicle covered by the guidelines, you’re advised to email the Tariff Classification Service, for advice on non-legally binding tariff classification commodity codes, before making a purchase to ensure that your vehicle will be eligible for the reduced rate of VAT at import.
Products designed by famous historical craftsmen
Products designed by famous historical craftsmen such as:
- De Morgan or William Morris tiles and ceramics
- Peter Waals desks and tables
- Mcintosh and William Morris home furnishings (for example, carpets, curtains, vases, clocks, chairs)
- decorative glassware produced by Galle, Lalique and Tiffany
Medals and militaria
This includes the following military medals:
- all military medals awarded up to and including World War 1
- medals awarded after World War 1 which are inscribed with the recipient’s name
- individual military medals awarded after World War 1 for an act of gallantry, outstanding service and so on, whether or not they bear the recipient’s name
All civil medals awarded individually which bear the recipient’s name.
General military items up to and including World War 1 such as weapons, badges and so on, items of militaria which belonged to, or were used by, a famous person who won a gallantry award.
11.5 What if I disagree with any of your decisions
If you do not agree with the decision issued to you, there are 2 options available. You can
- request a review by writing back to the decision maker within 30 days of the date of letter, giving your reasons why you do not agree with their decision
- appeal direct to the tribunal who are independent of HMRC
If you opt to have your case reviewed you will still be able to appeal to the tribunal if you disagree with the outcome.
You can find more information about reviews and appeals from our guide ‘Disagree with a tax decision’ or our fact sheet, HMRC1 decisions – what you can do if you disagree.
There are penalties for failing to comply with HMRC requirements. Serious breaches can lead to the imported goods being seized and criminal prosecution.
In your own interests, if you’re unsure about something please ask for advice by contacting VAT: general enquiries.
Your rights and obligations
Read Your Charter to find out what you can expect from HMRC and what we expect from you.
Do you have any comments or suggestions
If you have any comments or suggestions to make about this notice, please write to:
HMRC
Customs Directorate
10th Floor SW
Alexander House
21 Victoria Avenue
Southend-on-Sea
SS99 1AA
Last updated 9 October 2019 + show all updates
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In a no-deal Brexit, check whether you'll need to pay import VAT on goods you import from the EU.
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You now need to report imports that are over £873 in value on a Single Administrative Document.
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First published.