Using Postponed VAT Accounting for UK Import VAT

Postponed VAT accounting is a process which allows VAT registered businesses to report and then immediately recover the import VAT they incur on taxable supplies coming into the UK.

What is postponed accounting?

UK VAT registered businesses can use postponed accounting to account for the import VAT they incur on goods with a value more than £135. It means that rather than paying import VAT at the border and then reclaiming it on your return later (which affects your cash flow), you just show it on your VAT return.

Is postponed VAT accounting compulsory?

Postponed accounting is optional in most cases, so you can still pay import VAT upfront at the border if you prefer, although it’s compulsory if you defer customs declarations.
 

Can businesses in Northern Ireland use postponed accounting?

VAT registered businesses in Northern Ireland can use postponed accounting on imports from outside the UK and the EU. VAT, and the way businesses account for it, won’t change on goods moving between Northern Ireland and the EU.

Can I use postponed VAT accounting if I’m not VAT registered?

Only businesses which are VAT registered can use postponed accounting for import VAT. If you’re not VAT registered, you’ll need to pay any import VAT at the border.

How does postponed VAT accounting work?

Rather than paying import VAT on goods at the border, and then reclaiming it on your next VAT return, you ‘postpone’ the import VAT. This means you’ll account for the import VAT and recover it, all on the same VAT return. You won’t need to make a physical payment for the import VAT when your goods reach the UK border.

Do I need to pay customs duty if I use postponed VAT accounting?

Postponed VAT accounting only deals with import VAT, so you will still need to pay customs duty on goods you import. You may be able to defer the customs duty into monthly payments, although the business will need to register with HMRC for a duty deferment account to do this.

Do I need to change my VAT registration to use postponed VAT accounting?

You don’t need to get special permission to start accounting for import VAT on your VAT return. Just make sure:

• Your business is VAT registered
• You are importing goods which you will use in your business
• The customs declaration shows both your VAT registration number and EORI number

Postponed accounting and special procedures

Postponed accounting is also available if you use ‘special procedures’ to import in to the UK, and submit a declaration to release your goods. Special procedures include:

• Customs warehousing
• Inward processing
• Temporary admission
• End use
• Outward processing
• Duty suspension

Can I still reclaim import VAT without postponed accounting?

If your business is VAT registered, you can still reclaim import VAT you pay at the border on your VAT return. You’ll need a C79 certificate showing the amount of import VAT you’ve paid. Where you get your certificate from depends on how you make customs declarations.

Visit the GOV.UK site to find out how to get your C79 import VAT certificate. Remember, you can only reclaim import VAT and use postponed accounting if your business is registered for VAT.

How do I show postponed accounting on my VAT return?

You’ll need copies of your monthly postponed import VAT statements to complete your VAT return but your import VAT statements will only be available in your online account for six months after they’re published.

It’s absolutely crucial you make sure you download your statements! You won’t be able to use postponed VAT accounting on your return without the statements, so make sure you have a Government Gateway account which is linked to your EORI number to access your import VAT statements.

You’ll account for the import VAT you postpone when you fill in the VAT return for the accounting period which includes the import date.

What do I put in Box 1 for postponed accounting?

Show the postponed VAT which is due on imports for this period. This is the import VAT you chose to postpone, rather than paying at the border. The information will be available on your monthly statements for postponed import VAT.

You don’t need to complete Box 1 if you didn’t postpone the import VAT – just Box 4 and 7.

Box 4

Provide the amount of VAT you are reclaiming through postponed accounting on imports in this period.

Box 7

This is the total value of all imports on your online monthly statement, excluding any VAT.

Why are there imports missing from my postponed accounting report?

The imports won’t show on your postponed accounting reports if you deferred the customs declarations. You do still need to include them on your VAT return though, so you’ll need to estimate the import VAT for this VAT return, and then correct it on your next one.

Find out more about our VAT accounting services for businesses. Talk to one of the team on 020 3355 4047, or get an instant online quote.