The system of postponed VAT accounting for import VAT has been up and running since the start of the year, but there is still a lot of confusion. You may be experiencing some of these common problems.
Some importers have had difficulty accessing their monthly import VAT statements. The trick is to start from the link here, rather than trying to directly log on via your Government Gateway.
Remember that import VAT statements are only available online for six months from the date of publication, so they should be downloaded and stored securely.
Despite importing goods, you might not have paid any import VAT or received any paperwork. What has most likely occurred is the freight agent has defaulted to postponed VAT accounting without asking you. As a matter of urgency, you therefore need to enrol for the customs declaration service given the six-month statement availability. You can then declare, and normally reclaim, the import VAT on your VAT returns.
No import VAT shown
The lack of a VAT figure on an invoice for imported goods can be confusing, and different freight agents may well adopt different approaches.
Import VAT will generally be dealt with by VAT return entries under postponed VAT accounting, as explained above. However, the freight agent may have paid the VAT to release the goods, and you will then receive a form C79 from HMRC. This document is used to reclaim the VAT paid.
Form C79 not received
If you have not received a form C79 from HMRC, it may be because:
- The form is sent by post, so it might have got lost; or
- The freight agent may have defaulted to postponed VAT accounting without telling you.
Finally, there is also the common problem of accounting for the import VAT. The correct VAT coding will be particularly important for partially exempt businesses because they may not be able to recover all of the VAT. If in doubt, the best advice is to get help from your software provider; each accounting package may well have a different approach to dealing with import VAT.
You can check when it is possible to use postponed VAT accounting here and of course we’re here to help.