UK import VAT from January 1, 2021
After the transition period following Brexit ends, paying UK import VAT on purchases of goods from abroad will change. From January 1, 2021, if your business is registered for VAT in the UK, you will be able to account for import VAT on your VAT Return for goods imported from anywhere in the world. This means businesses should declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later.
You do not need to be authorized to account for import VAT on your VAT Return and can start doing so from January 1, 2021.
You can account for import VAT if:
- the goods you import are for use in your business;
- you include your EORI number, which starts ‘GB’ on your customs declaration;
- you include your VAT registration number on your customs declaration, where needed.
It is not possible to account for import VAT on your VAT Return if: you are authorized to use simplified declarations for imports and you complete your simplified frontier declaration before January 1, 2021. This will be the case even if you complete your supplementary declaration after this date.
An online monthly statement will be available to download and it will show the total import VAT postponed for the previous month which you should include in your VAT Return.
VAT Return completion
Due to postponed VAT accounting, there will be changes to the way you complete the boxes on your VAT Return:
- Box 1 Include the VAT due in this period on imports accounted for through postponed VAT accounting.
- Box 4 Include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting.
- Box 7 Include the total value of all imports of goods included on your online monthly statement, excluding any VAT.
If you are eligible to defer your customs declarations, you must account for import VAT on your VAT Return which includes the date that you imported the goods. To complete the boxes on your VAT Return, you will than need to estimate the import VAT due from your records of imported goods. Subsequently, when you submit your deferred declaration, your next online monthly statement will show the amount of import VAT due on that declaration. You will then be able to adjust your estimate and account for any difference on your next VAT Return.
Do you have any questions? Our VAT compliance specialists are always there to help you. Preparing and filing your VAT returns is one of our VAT services. Please contact us at +31(0)88-4321800 or send an email to email@example.com
Source & more information: GOV.UK