Goods you do not include when valuing for import VAT
Find out what goods you do not value when when working out the VAT due on import to the UK.
When valuing goods for VAT purposes, do not include costs that are taxable under the reverse charge or international service arrangements. These are:
- royalties
- licence fees
- buying commissions
Transmission and provision of information
Do not include the transmission and provision of information by satellite, phone, telex, facsimile and so on. They are treated as services.
Find out how to deal with supplies of services in Notice 741A.
Auctioneer commission
When auctioneers value goods for the purposes of import VAT they’ll charge commission to the buyer; this is called the buyer’s premium.
Do not include the buyer’s premium when working out the value for import VAT purposes for:
- works of art
- antiques
- collectors’ items sold by auction while subject to the temporary admission regime
The buyer’s premium is taxed under the normal rules as a standard-rated domestic supply.
Auctioneers should consult the Auctioneers’ Scheme for more information on how to account for VAT on a margin equal to the value of the services they provide.
Some works of art, antiques and collectors’ items are entitled to a reduced valuation at importation.
Computer software
Certain software products should not be included in your valuation. These are:
- items made to meet 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, that are supplied under contractual obligation to customers who’ve bought the original program
No import VAT is due on these products for VAT purposes. The total value of the software and carrier medium is treated as the consideration for the supply of services and is taxed according to the country it is in.
However, 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 on it, adjusted where appropriate.
Where the customs value is declared on the basis of the transaction value, it should be based on the price actually paid (or payable) for both the carrier medium, and the data and instructions on it.
If the software is supplied to you free of charge (for example, in an inter-company transaction) you’ll pay VAT on the value in accordance with the valuation rules.
Normalised software
Normalised software products are mass produced items which normally:
- have specific programs and support material
- include the service of installation, training and maintenance
- can be used by all customers without specific training
Examples of normalised software products are:
- personal computer software
- home computer software
- home game packages
- packages with security devices added to them
For customs valuation purposes, no distinction is made between normalised or specific software.