Check when you can account for import VAT on your VAT Return

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

Who can account for import VAT on their VAT Return

If your business is registered for VAT in the UK, you can 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

You can also account for import VAT for goods you move between Great Britain and Northern Ireland that are declared into a customs special procedure, when they are removed from that special procedure.

There are 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.

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

If you import goods for both business and non-business purposes

You can account for import VAT on your VAT return if you import goods which will be used for both business and non-business purposes. You can also account for the import VAT on your VAT return if you do not know if the goods will be used for business purposes at the time that you import them.

You cannot account for import VAT on your return if you import goods you know will be used solely for non-business purposes. Instead, when you complete your customs declaration, you should select that you’ll be making immediate payment or using a duty deferment account.

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

Excise goods

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:

  1. Declare the highest value for VAT.
  2. Select that you’ll be accounting for import VAT on your VAT Return.

If you are using the Customs Declaration Service, you should:

  1. Use a guarantee to cover the amount of VAT that is unknown.
  2. 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.

You must also account for import VAT on your return if all of the following apply:

  • you import goods into Northern Ireland from outside the UK and EU in consignments valued £135 or less
  • the goods are not excise goods
  • you provide your VAT registration number to the business that supplies the goods to you

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. You should keep a written record of what is agreed.

If your business receives goods through the post in consignments exceeding £135 using Royal Mail Group (including Parcelforce where they are not acting as a fast parcel operator) you will not be able to account for import VAT on your VAT return. This is because Royal Mail Group do not currently offer this facility.

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.

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.

Accounting Software 

Your accounting software should now be set up to account for import VAT – Click HERE to see how to account for import VAT for Quickbooks, Xero and Sage. For any other accountancy software you will need to contact your software provider.