Accounting for import VAT if the UK leaves the EU without a deal

If you’re a VAT-registered business find out how to account for import VAT on all goods brought into the UK if the UK leaves the EU with no deal.

If the UK leaves the EU with no deal, from 11pm GMT on 29 March 2019, businesses registered for VAT in the UK will be able to account for import VAT on their VAT return rather than pay when, or soon after, the goods arrive at the UK border.

This will apply to goods from both EU and non-EU countries and will help businesses currently moving goods into the UK from other EU member states to reduce any cash flow impacts after the UK leave the EU.

Businesses or individuals who are not VAT registered in the UK will not be able to account for import VAT in this way. They’ll need to pay import VAT up front at the time of import.

From 29 March 2019, all businesses importing goods into the UK will need a UK Economic Operator Registration and Identification (EORI) number.

When to account for import VAT on your VAT return

You can account for import VAT on your VAT return if:

  • the goods are for use in your business
  • your VAT registration number is shown on your customs declaration, or EORI number if you are using the Customs Handling of Import and Export Freight (CHIEF) system

The goods can be imported from anywhere in the world. This could be when the goods enter the UK or when they are released into free circulation from a customs special procedure, for example:

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

If you’re using transitional simplified procedures you can also account for import VAT on your VAT return.

Goods already in transit at 11pm GMT on 29 March 2019

Any goods in transit from the EU must continue to be treated as acquisitions and VAT accounted for on the return for the period in which the acquisition occurs.

If you’re bringing goods into the UK under customs freight simplified procedures (CFSP) and you’ve completed your simplified frontier declaration before 11pm on 29 March 2019, you will not be able to account for import VAT on your VAT return even if your supplementary declaration is completed after this time.

How to account for import VAT

If you use software or directly access the CHIEF system to declare your customs duties, you’ll need to:

  • input your EORI number (which includes your VAT registration number) into either registered consignee (SAD box 44h) or consignee (SAD box 8)
  • enter ‘G’ as the method of payment

If you use the new Customs Declaration Service (CDS) to declare your customs duties you need to enter your VAT registration number at header level in data element 3/40.

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

You can still account for import VAT on your VAT return, even if you cannot confirm the customs value of the goods imported. You should declare the highest value for VAT and reclaim any eligible input tax under the normal rules. See VAT Notice 252 for more information on the customs value of goods.

How to complete your VAT return

A monthly statement will be generated online which you should download and keep for your records. It will indicate the total import VAT postponed for the previous month and when to include it in your VAT return. There will be changes to the way you complete the boxes on your VAT return.

Box number What to include
Box 2 VAT due in this period on imports accounted for on your VAT return
Box 4 VAT reclaimed in this period on purchases and other inputs (including imports)
Box 8 Total value of all exports of goods, excluding any VAT
Box 9 Total value of all imports of goods, excluding any VAT

If your VAT return period includes 29 March 2019 you will need to account for VAT in 2 ways:

  • use your current process up to 10:59pm GMT on 29 March 2019
  • account for import VAT on your VAT return from 11pm onwards.

CHIEF or CDS will issue the following import VAT statement:

  • a C79 import VAT certificate for imports made up to 10.59pm on 29 March 2019
  • a monthly import VAT statement for imports made from 11pm on 29 March 2019

Further information on statements will be available at a later date.

Monthly postponed import VAT statements for March 2019

Your monthly import VAT statement showing declarations made from 11pm on 29 March to 31 March 2019 will be available at the same time as April’s statement.

If your import VAT statement is not available when you have to submit your return covering March 2019, you can estimate the import VAT you want to declare and reclaim. Work out the figures using the evidence available (for example your purchase invoices). You must be able to show your figures are a reasonable estimate based on the evidence available.

Any adjustments should be made on your next VAT return, once you have your import VAT statement.

If you have an agent

If you have an agent, you may want to authorise them to account for import VAT on your VAT return and talk to them about how it may affect your business.

To make customs declarations on your behalf and account for import VAT on your VAT return they should:

  • use your VAT registration number, or EORI number
  • have your agreement to account for import VAT on your VAT return

Agents must not use their own VAT registration number.

Postal imports worth £135 or less

If you import goods for use in your business and the seller sends them as a postal parcel you will not be able to account for import VAT on your VAT return if the goods are worth £135 or less.

You should pay the import VAT up front and the overseas seller of the goods must account for the import VAT. You should then use the invoice to reclaim the import VAT on your next VAT return.

If you do not account for import VAT on your VAT return

If you choose not to account for import VAT on your VAT return, you may be at a significant cash-flow disadvantage. For example, you would have to pay the import VAT 2 months before you would be able to reclaim it.

You will have to declare import VAT when goods arrive in the UK, or enter free circulation, if you use:

  • CHIEF to make declarations, you could select to pay or secure the import VAT by declaring the method of payment on the VAT tax line
  • CDS to make declarations, you would not enter your VAT registration number at header level in data element 3/40
Published 6 March 2019
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