Postponed import VAT accounting

In order to use postponed import VAT accounting for all imports into the UK from 1 January 2021, the correct indicator will be required to be completed on the import entry.

HMRC’s guidance explains that the ‘Method of payment’ box 47e on form C88 should be completed as CODE G. It is therefore important that you instruct your agent/freight forwarder that you wish to use postponed import VAT accounting so that the declarations are completed correctly.

If you opt to use postponed import VAT accounting, you will get a monthly postponed import VAT statement online which will be accessible for 6 months from the date it published. It is therefore important a copy of each statement is downloaded and retained in your records. HMRC provide further guidance on this.

Delayed customs declarations

If you import goods that are not controlled into Great Britain from the EU between 1 January and 30 June 2021 and delay your customs declaration you must use postponed import VAT accounting and account for the import VAT due on the VAT return which includes the date the goods were imported.

Delaying the customs declaration means the import will not appear on the online monthly statement. To complete the boxes on the VAT return, taxpayers will need to estimate the import VAT due from their records of imported goods. The estimate should be as accurate as possible, based on the amount paid for the goods and any other costs you have agreed to cover, for example:

  • Packaging;
  • Transport;
  • Insurance.

The estimate can also include any customs duties due on the goods, but it does not have to do so.

When the delayed declaration is submitted, the indicator that VAT will be accounted for on the VAT return should be selected. The next online monthly statement will reflect the actual import VAT due. This amount will take into account import VAT due on any additional customs duties. You’ll then be able to:

  • Adjust your estimate; and
  • Account for any difference on your next VAT return.

HMRC provide further guidance on this.

Contact us

For further advice, please contact Hydeam Sulton (hydeam.sulton@taitwalker.co.uk) or Louise Phillipps at (louise.phillipps@taitwalker.co.uk).