Paying VAT on imports from outside the UK to Great Britain and from outside the EU to Northern Ireland
If you import goods into Great Britain from outside the UK or from outside the EU to Northern Ireland you may have to pay import VAT on goods. For supplies of services from outside the UK you must account for VAT under the reverse charge procedure.
Most businesses get someone to deal with customs and transport their goods.
This guide applies to goods imported into:
- Great Britain (England, Scotland and Wales) from a place outside the UK
- Northern Ireland from a place outside the EU
It applies to supplies of services received from outside the UK.
All references to the UK apply to these situations.
Find out what you need to do if you are making sales of goods between Great Britain and Northern Ireland, into Northern Ireland from the EU or from Northern Ireland to the EU.
You must tell HMRC about goods that you bring into the UK, and pay any VAT and duty that is due. You may also be able to defer, suspend, reduce or obtain relief from import VAT.
Imported goods: accounting for import VAT
These are normally charged at the same rate as if they had been supplied in the UK. But if you import works of art, antiques and collectors’ items they’re entitled to a reduced rate of VAT.
VAT-registered businesses can account for import VAT on their VAT Return by using postponed VAT accounting. Accounting for VAT on your VAT Return in this way allows you to declare import VAT and reclaim it as input tax on the same VAT Return. You can reclaim the VAT incurred on the imported goods you own as input tax subject to the normal rules.
Alternatively a business can choose to pay import VAT on importation. If you choose to do this, you can reclaim the VAT incurred on the imported goods you own as input tax subject to the normal rules.
To claim input tax you will need the import VAT statement as evidence. A shipping or forwarding agent cannot usually reclaim this input tax because the goods were not imported to be used in part of their business.
If you’re importing certain goods temporarily – that is, you intend to re-export them within 2 years – you can use temporary importation to obtain total or partial relief from import duties.
If you import goods temporarily but then for whatever reason choose to put them into free circulation in the UK, you’ll have to pay duty, import VAT – and compensatory interest for certain types of goods.
If you use delayed declarations and are registered for VAT you must account for import VAT on your VAT Return. Find out more about accounting for import VAT on your return.
If you’re a UK trader and not registered for UK VAT you still have to pay the import VAT, but you will not be able to reclaim it.
If you’re a non-UK trader and not registered for UK VAT you can arrange for an agent in the UK to import and supply goods on your behalf. The agent’s supply of services to you will be at the standard rate of VAT which you will not be able to reclaim. The agent will be able to recover the import VAT as input tax, if they are an agent acting as principal under Section 47 of the VAT Act.
If you use delayed declarations and are not registered for VAT, you will pay import VAT when you make your supplementary declaration. Find out more about delaying declarations.
Valuation of imported goods
The value for VAT of imported goods is their customs value, determined by the rules in Notice 252, as well as:
- incidental expenses – such as commission, packing, transport and insurance costs incurred up to the goods’ first destination in the UK
- any Customs Duty or levy payable on importation into the UK
- any Excise Duty or other charges payable on importation into the UK – except the VAT itself
The value of VAT is normally added to box 22 of the import declaration automatically. If it needs to be calculated manually, you must enter the code ‘VAT’ in the rate column of box 47, and enter the value in the amount column.
Goods destined for another country
If you’re importing goods that are destined for another country (for example Ireland) you must either:
- pay UK import VAT and put the goods into free circulation
- place the goods into Temporary Storage, such as warehousing
- move the goods across the UK under a transit procedure
If you’re importing goods into Northern Ireland from outside the UK and EU that are destined for an EU country if you pay UK import VAT, you may be able to obtain Onward Supply Relief.
Get a customs identification number
If you plan to import any goods you’ll need to get an EORI (Economic Operator Registration and Identification) number. You’ll need it when you supply information to customs authorities, for example when completing customs declarations.
Services received from overseas suppliers
When you buy services from suppliers in other countries, you may have to account for the VAT yourself – depending on the circumstances. This is called the ‘reverse charge’. Where it applies, you act as if you’re both the supplier and the customer. You charge yourself the VAT and then claim this back as input tax subject to the normal rules. In most cases the 2 amounts will be the same and cancel each other out.
When the reverse charge applies
The reverse charge on services only applies when the supplier is in a different country from you, you’re in business, belong in the UK and receive either:
- one of the services that are covered by the general rule for place of supply of services
- certain other services
Read Notice 741A for more information.
Dealing with the reverse charge
You calculate the amount of VAT (output tax) on the full value of the services supplied to you, and then enter on your VAT Return the:
- amount of VAT you calculated in box 1, and if you’re entitled to reclaim some or all of the VAT on your purchase of these supplies, also put the same figure in box 4 (this in effect cancels out the figure in box 1)
- full value of the supply in both box 6 and box 7
Value of services from other countries
The amount of VAT payable of any service from another country is the same as the amount of VAT that would be paid if the service were supplied to you by a UK supplier for the same net amount.
You must account for the value of the services in sterling, so you must convert their value into sterling if the services were priced in any other currency.
Find out more about the reverse charge and services supplied from abroad in Notice 741A.
Claiming relief on re-imported exported goods
If you’ve exported goods and you re-import them, you may be able to claim back the VAT that you pay when you import them. If the goods were originally sent out of the UK temporarily – for example for exhibition, or because they were on sale or return and they were returned – there is no UK VAT due on import. Otherwise, you may be able to obtain Returned Goods Relief.
Returned Goods Relief
To qualify for Returned Goods Relief, the goods must have been exported and must then have been imported back into (and gone into free circulation in) the UK. Find out more about paying less import duty and VAT when re-importing goods to the UK.
Arrangements to defer or suspend payment of import VAT
If you are VAT-registered persons you can account for import VAT on your VAT Return by using postponed VAT accounting.
If you are VAT registered and choose not to account for import VAT on your VAT Return, or if you are not VAT registered, then you will need to pay any VAT due on imported goods outright at importation. You may also able to defer payment of import VAT.
Deferring import VAT payments
For larger payments, if you’re a regular importer, you can defer paying import duty and VAT by setting up an account with HMRC. Setting up a deferment account is free of charge, but you’ll need to arrange a bank guarantee. If HMRC authorises you to use Simplified Import VAT Accounting this guarantee can be reduced.
If you import goods on a temporary basis, you may not need to pay some or all of the import duty or VAT.
Goods stored under customs warehousing
If you import goods and store them under an inventory system known as a customs warehouse, payment of import duties or VAT can be suspended. A wide range of goods can be stored using a customs warehouse.
Find out how to apply to operate a customs warehouse.
Last updated 31 December 2020 + show all updates
Check how to pay duties and VAT on imports
If you’re a business importing goods from outside the UK, you can pay Customs Duty, excise duties and VAT in a number of ways.
Not paying at the time goods enter the UK
Duty deferment account
A duty deferment account lets you make one payment a month by Direct Debit instead of paying for individual consignments.
- you delay paying the charges for an average of 30 days
- you do not have to pay immediately each time you want to clear your goods
- HMRC can normally clear your goods more quickly because they do not have to handle payments for each transaction
You’ll be able to get copies of your duty deferment statements online.
Postponed VAT accounting
Postponed VAT accounting lets you declare and recover import VAT on your VAT Return. You can check when you can account for import VAT on your VAT Return.
Paying at the time goods enter the UK
Customs Handling of Import and Export Freight (CHIEF) system
You can use the flexible accounting system when your goods move across the border if:
- you want to pay by bank transfer, guaranteed cheque or bank draft
- you’re a Direct Trader Input (DTI) agent
You use the account in a similar way to a bank current account, with the exception that there are no charges for using the account, no overdraft facility and no interest.
Customs Declaration Service
If you use the Customs Declaration Service you can use cash accounting to pay for your customs duty and import VAT.
You can also use immediate payment methods such as:
- online or telephone banking
- CHAPS (Clearing House Automated Payment System)
- Bacs (Bankers Automated Clearing System)
Find more information on how to pay for imports declared using the Customs Declaration Service.
Import VAT certificates (C79)
If you’re registered for UK VAT, check how to get your import VAT certificate (C79). You’ll need this to claim import VAT as input tax on your VAT Return if you have not used Postponed VAT Accounting.
Last updated 15 November 2021 + show all updates