If your business is registered for VAT in the UK, find out when you can, or need to, account for import VAT on your VAT Return (also called postponed VAT accounting).
Accounting for import VAT on your VAT Return means you’ll declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later.
The normal rules about what VAT can be reclaimed as input tax will apply.
Who can account for import VAT on their VAT Return
From 1 January 2021, if your business is registered for VAT in the UK, you’ll be able to account for import VAT on your VAT Return for goods you import into:
- Great Britain (England, Scotland and Wales) from anywhere outside the UK
- Northern Ireland from outside the UK and EU
There will be no changes to the treatment of VAT or how you account for it for the movement of goods between Northern Ireland and the EU.
You do not need any approval to account for import VAT on your VAT Return.
Non-established taxable persons
If you want to account for import VAT on your VAT Return, you must tell the person dealing with customs for you to select this on your customs declaration and enter your details as the consignee.
When you can account for import VAT on your VAT Return
You can do this if:
- the goods you import are for use in your business
- you include your VAT registration number on your customs declaration
Goods in special procedures
If you declare goods into a customs special procedure, you can select that you’ll be accounting for import VAT on your VAT Return when you submit the declaration that removes them into free circulation from the following special procedures:
- customs warehousing
- inward processing
- temporary admission
- end use
- outward processing
- duty suspension
You can select to account for import VAT on your VAT Return when you release excise goods for use in the UK – also known as ‘released for home consumption’.
This includes when goods are released from an excise warehouse after being in duty suspense since the point of import.
If you do not know the full customs value of goods
You can still account for import VAT on your VAT Return, even if you cannot confirm the full customs value of the goods that you import.
If you are using CHIEF, you should:
- Declare the highest value for VAT.
- Select that you’ll be accounting for import VAT on your VAT Return.
If you are using the Customs Declaration Service, you should:
- Use a guarantee to cover the amount of VAT that is unknown.
- Select that you’ll be accounting for import VAT on your VAT Return for the amount that is known.
When you must account for import VAT on your VAT Return
If you import goods that are not controlled into Great Britain from the EU between 1 January and 30 June 2021, you must account for import VAT on your VAT Return if you either:
- delay your customs declaration
- use a simplified customs declaration to make a declaration in your own records
You must make sure that when you complete the supplementary declaration you select that you’ll be accounting for import VAT on your VAT Return.
Using someone to import goods on your behalf
If you get a person or business to import goods on your behalf (such as a freight forwarder, customs agent, broker or fast parcel operator) you will need to tell them how you want to account for import VAT on those imports, so they can complete the customs declaration.
If you already have someone you should contact them to tell them if you want to account for import VAT on your VAT Return on goods you import from 1 January 2021. You should keep a written record of what is agreed.
Buying goods from a supplier, who arranges for someone to import goods on your behalf
You can buy goods from a supplier who arranges for a person or business - such as a fast parcel operator - to import and deliver the goods for you. You must agree with the supplier how you want to account for import VAT, so that they can tell them to make the appropriate entry on the customs declaration. You should keep a written record of what is agreed.
Unless your supplier specifically tells them not to, some fast parcel operators will select the option for you to account for import VAT on your VAT Return. Your supplier will tell you about this when they ask you for your EORI or VAT registration number. You will need to tell your supplier if you do not want to account for import VAT on your VAT Return.
The import will appear on your monthly statement in the normal way.
How to complete your customs declaration in order to account for import VAT on your VAT Return
When you complete your customs declaration you can select that you’ll be accounting for import VAT on your VAT Return.
If you use the Customs Handling of Import and Export Freight (CHIEF) system
On your declaration, you’ll need to enter:
your EORI number starting with ‘GB’ which includes your VAT registration number into box 8 (Header Consignee), or, if applicable, your VAT registration number in box 44h (Registered Consignee)
‘G’ as the method of payment in Box 47e
If you use the Customs Declaration Service
You need to enter your VAT registration number at header level in data element 3/40.
VAT will be recorded against your EORI and will be at declaration level only.
If you act on behalf of someone else
If you’ve been authorised to act on behalf of your client, you must use their EORI number or VAT registration number on the customs declaration.
If you import goods in consignments not exceeding £135 in value
Find out about the treatment of VAT for overseas goods sold:
- to customers in Great Britain using online marketplaces from 1 January 2021
- directly to customers in Great Britain from 1 January 2021
These rules will not apply to the import of consignments of goods containing excise goods, you can choose to account for the import VAT on your VAT Return for those consignments.
Further guidance on consignments into Northern Ireland will be provided in a later update.
What you need to do next
If you have selected that you are accounting for import VAT on your VAT Return on your customs declaration you will need to account for import VAT when you complete your VAT Return.