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Import to the UK and postpone import VAT

By Sofi / In UK VAT / August 1, 2022

Vat return

 

When you want to import to the UK you don’t need to pay VAT at customs and then refund it. There is a possibility to account for import VAT in your VAT return. This scheme is available not only for UK-based businesses but also for non-UK businesses with UK VAT numbers.

For parcels with a value below 135 pounds, it goes without saying. You can read more about low-value goods imported here.  In this article, we pay attention to bigger value imports.

 

There are five steps you need to follow to apply the postponed VAT scheme:

  1. Have UK VAT number.
  2. If you are a non-EU business you need to use a declarant to fill your customs declaration.
  3. Tell your authorized declarant that you want to use a postpone import VAT.
  4. Download the import VAT statement for each month as proof for tax accounting.
  5. Reflect import in your VAT return.

 

When to pay VAT if I use a postponed import VAT scheme?

Normally if you use imported goods for a taxable sale there would be no VAT due from this transaction. You need to show output vat and in the same reporting period, you can credit it. But in case there is a

For example The Indian e-commerce seller imported goods to the UK Amazon FBA warehouse. This seller used a broker to declare imported goods and used a postponed VAT scheme. E-commerce sellers reflect import VAT as output and as input VAT in the UK VAT returns. Bear in mind that future sales would be a deemed supplier provision and this transaction will be zero-rated. Read more about deemed invoices here.

 

When do I need to submit VAT returns if I use a postponed import VAT scheme?

You should stick with your current periodicity. That means that if you submit your returns quarterly you don’t need to change it to monthly if you use a postponed VAT import scheme.

 

What amount should I show in VAT return? 

If you have import value in dollars you need to use a conversion rate for the month of import. You need to calculate VAT on intrinsic value, which means that you need to include a contract price of goods plus transport, insurance, and packing costs.