The end of the Brexit transition period means there are changes which VAT registered businesses must be aware of. The changes include the introduction of postponed VAT accounting for VAT registered importers.
UK VAT registered businesses can use postponed accounting to account for import VAT on goods worth more than £135. It means that VAT registered businesses can account for import VAT on their VAT return, rather than paying it upfront at the border.
Postponed accounting for import VAT became available on
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 that businesses account for it, won’t change on goods moving between Northern Ireland and the EU.
Why did the government introduce postponed accounting?
The EU has special VAT rules which aim to encourage trade between member countries. Now that the Brexit transition period is over, the UK is no longer a member of the EU VAT area.
Goods crossing the UK/EU border are now imports or exports.
This means UK businesses must now pay import VAT when importing goods worth more than £135, even if they’re importing from the EU. This is on top of any customs and excise charges that are also due.
The government brought in postponed accounting to help businesses adjust to the change. In doing so, postponed accounting aims to reduce the impact which import VAT can have on a business’ cash flow.
How does postponed accounting for VAT 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 that 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.
An important note for completing your VAT return
You’ll need copies of your monthly postponed import VAT statements to complete your VAT return.
Your import VAT statements will only be available in your online account for six months after they’re published.
Do I need to pay customs duty if I use postponed accounting?
Postponed 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. The business will need to register with HMRC for a duty deferment account to do this.
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:
Do VAT registered businesses need to use postponed accounting?
Postponed accounting is optional in most cases, so you can still pay import VAT upfront at the border if you prefer. If you defer customs declarations, then postponed accounting is a requirement.
Can I still reclaim import VAT without postponed accounting?
If your business is VAT registered, you can still reclaim import VAT that you pay at the border on your VAT return. You’ll need a C79 certificate, which shows the amount of import VAT you’ve paid. Where you get your certificate from depends on how you make customs declarations.
You’ll account for the import VAT you postpone when you complete the VAT return for the accounting period covering 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 that is due, that 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.
Provide the amount of VAT you are reclaiming through postponed accounting on imports in this period.
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?
If you deferred the customs declarations, the imports won’t show on your postponed accounting reports. You do still need to include them on your VAT return though. You will need to estimate the import VAT for this VAT return, and then correct it on your next one.