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Import VAT

Claiming Import VAT Back

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Hi there

 

Just trying to clarify my understanding of import VAT for a VAT Registered client who bought computer equipment to supply as part of his trade. 

I am a small part time practice and this is the first time I've had a client buy from outside the UK since Brexit.  My questions are:

1. He will pay import VAT at the time it arrives in the UK.  Can he reclaim the VAT back on his VAT return?  If so, how?

2. If he was to start importing more regularly he should appoint a freight agent and either set up a deferment account or use Postponed Import VAT Reporting?

3. Under a deferment account the goods are released but HMRC deducts the VAT 45 days later by direct debit.  Like question one above, can he reclaim this back? 

4. Under Postponed Reporting, payment is made to HMRC and he accounts for the import tax in both Box 1 and Box 4.  

Thank yoo very much for sticking with me.

 

Replies (7)

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By paul.benny
21st Jul 2021 16:11

You might find it useful to refer to the excellent Brace for Brexit series of articles on here.

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Replying to paul.benny:
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By BMary83
22nd Jul 2021 09:43

Thank you, this is exactly what I was looking for.

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Psycho
By Wilson Philips
21st Jul 2021 16:14

The short answer is, yes, he should be able to recover any import VAT, however paid, as input VAT - in all cases via his VAT return. Subject to the usual caveats about making fully taxable supplies etc.

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By Wanderer
21st Jul 2021 16:40

1. Yes & yes, unless he informs the freight company (& they get the paperwork right) that he is using PVA.
2. Yes he can do this. Good idea to set up a deferment account just for the duty. For the VAT tell the freight company he is using PVA.
3. See 2.
4. Yes, (assuming full input VAT recovery as Wilson mentions).

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Replying to Wanderer:
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By BMary83
22nd Jul 2021 09:50

Thank you for your reply.

On further point to clarify from your reply:

So if he doesn't use a PVA he can claim the VAT back via Box 4?

And if he does use a PVA he accounts for it via Box 1 and Box 4?

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Replying to BMary83:
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By Wanderer
22nd Jul 2021 09:53

Yes & yes.

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Replying to Wanderer:
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By BMary83
22nd Jul 2021 09:57

Thank you.

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