Check when you can account for import VAT on your VAT Return

Last updated 1 October 2022

Accounting for import VAT on your VAT Return has significant cash flow benefits and will be available permanently. It means you’ll declare and recover import VAT on the same VAT Return, rather than having to pay it upfront when the goods are imported and recover it later.

The normal rules about what VAT can be reclaimed as input tax apply.

Who can account for import VAT on their VAT Return

If your business is registered for VAT in the UK, you can account for import VAT on your VAT Return for goods you import into:

• Great Britain (England, Scotland and Wales) from anywhere outside the UK
• Northern Ireland from outside the UK and EU

You can also account for import VAT for goods you move between Great Britain and Northern Ireland that are declared into a customs special procedure, when they are removed from that special procedure.

You do not need any approval to account for import VAT on your VAT Return.

Non-established taxable persons

If you are a non-established taxable person you’ll need to get someone to deal with customs for you, including completing your customs declaration.

If you want to account for import VAT on your VAT Return, you must tell the person dealing with customs for you to select this on your customs declaration and enter your details as the consignee.

When you can account for import VAT on your VAT Return

You can do this if:

• the goods you import are for use in your business
• you include your VAT registration number on your customs declaration

If you import goods for both business and non-business purposes

You can account for import VAT on your VAT return if you import goods which:

• will be used for business and non-business purposes
• you do not know if the goods will be used for business purposes at the time that you import them

You cannot account for import VAT on your VAT return if you import goods you know will be used solely for non-business purposes, unless you are a body that is eligible to reclaim import VAT through a VAT refund scheme (Section 33). When completing your customs declaration, you should select you’ll be making an immediate payment or using a duty deferment account.

Goods in special procedures

If you declare goods into a customs special procedure, you can select that you’ll be accounting for import VAT on your VAT Return when you submit the declaration that removes them into free circulation from the following special procedures:

• customs warehousing
• inward processing
• temporary admission
• end use
• outward processing
• duty suspension

Excise goods

You can select to account for import VAT on your VAT Return when you release excise goods for use in the UK – also known as ‘released for home consumption’.

This includes when goods are released from an excise warehouse after being in duty suspense since the point of import.

If you do not know the full customs value of goods

You can still account for import VAT on your VAT Return, even if you cannot confirm the full customs value of the goods that you import.

To do this, you should:

1. Use a guarantee to cover the amount of VAT that is unknown.
2. Select that you’ll be accounting for import VAT on your VAT Return for the amount that is known.

When you must account for import VAT on your VAT Return

If you import goods that are not controlled into Great Britain from Ireland, you must account for import VAT on your VAT Return if you either:

• delayed your import declaration by making an entry in your own records without authorisation
• use a simplified declaration for imports to make a declaration in your own records

You must make sure that when you complete the supplementary declaration you select that you’ll be accounting for import VAT on your VAT Return.

Using someone to import goods on your behalf

If you get a person or business to import goods on your behalf (such as a freight forwarder, customs agent, broker or fast parcel operator) you will need to tell them how you want to account for import VAT on those imports. This is so they can complete the import declaration.

If you already have someone, you should contact them to tell them if you want to account for import VAT on your VAT Return on goods you import. You should keep a written record of what is agreed.

If your business receives goods through the post in consignments exceeding £135 using Royal Mail Group (including Parcelforce where they are not acting as a fast parcel operator) you will not be able to account for import VAT on your VAT Return.

Royal Mail Group offers postponed VAT accounting for commercial (non-postal) services, if requested by the importer.

Buying goods from a supplier, who arranges for someone to import goods on your behalf

You can buy goods from a supplier who arranges for a person or business, such as a fast parcel operator or other intermediary, to import and deliver the goods for you.

You must agree with the supplier how you want to account for import VAT so that they can tell the intermediary to make the appropriate entry on the import declaration. You should keep a written record of what is agreed.

Some intermediaries may include postponed VAT accounting as the default setting for accounting for import VAT in their terms and conditions. Unless your supplier specifically tells them not to, they will select this option and expect you to account for import VAT on your VAT Return.

You must tell your supplier if you do not want to use postponed VAT accounting.

The import will appear on your monthly statement in the normal way.

How to complete your customs declaration in order to account for import VAT on your VAT Return

When completing your import declaration, you can select to account for import VAT on your VAT Return. You cannot change how you want to account for import VAT on your import declaration once it’s submitted.

You need to enter your VAT registration number at header level in Data Element 3/40 (you should not use method of payment G in Data Element 4/8).

VAT will be recorded against your EORI number and will be at declaration level only.

If you act on behalf of someone else

If you’ve been authorised to act on behalf of your client, you must use their EORI number or VAT registration number on the import declaration.

If you import goods in consignments valued at £135 or less

There are different rules for the treatment of goods in consignments valued at £135 or less.

Find out about the treatment of VAT for imported goods sold:

• to customers in the UK using online marketplaces
• directly to customers in the UK

These rules do not apply to the import of excise goods. You can choose to account for import VAT on your VAT Return for the import of consignments of excise goods of any value.

If you import commercial goods (merchandise in baggage) into to Great Britain or Northern Ireland

If you are importing commercial goods into Great Britain or Northern Ireland in your personal baggage or private motor vehicle and want to account for import VAT on your VAT return, you will need to make a full customs declaration.

If you are eligible to make a simple online declaration instead and choose to do so, you will not be able to account for import VAT on your VAT return.

Find out more about bringing commercial goods into Great Britain in your baggage.

Find out more about bringing commercial goods into Northern Ireland in your baggage.

What you need to do next

If you have selected that you are accounting for import VAT on your VAT Return on your customs declaration you will need to account for import VAT when you complete your VAT Return.