17th December 2020 Posted by - Alexander Accountancy
From 1 January 2021, businesses will be able to account for import VAT on imports into Great Britain (England, Scotland and Wales) from EU and non-EU countries. Businesses in Northern Ireland will be able to use the postponed VAT accounting for goods imported from outside the UK and EU. The normal rules setting out what VAT can be reclaimed as input tax will apply.
HMRC’s guidance on the new postponed VAT accounting rules for imports into the UK has been updated. This system will save businesses from having to pay VAT upfront at the time of import and then having to recover. This will help cashflow and hopefully keep goods moving. The guidance now includes additional information on how to complete your declaration if you are accounting for import VAT on your VAT return.
VAT registered businesses do not need approval to account for import VAT on their VAT Return and can start doing so from 1 January 2021.
Postponed import VAT accounting can be used if:
- the goods are imported for use in your business
- you include your business’ VAT registration number on your customs declaration.
Businesses eligible to defer submitting supplementary declarations for up to 6 months, must account for import VAT on their VAT Return.