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Accounting for import VAT on your VAT return

From 1 January 2021, if your business is registered for VAT in the UK, you will need to consider how to treat VAT added to imports from the EU.

Accounting for import VAT on your VAT Return means you will declare and recover import VAT on the same VAT Return, rather than having to pay it upfront and recover it later.

The normal rules that may restrict the amount of VAT you can claim back will remain the same.

Who can account for import VAT on their VAT Return?

You will be able to account for import VAT on your VAT Return for goods you import into:

  • Great Britain (England, Scotland and Wales) from anywhere outside the UK
  • Northern Ireland from outside the UK and EU

There will be no changes to the treatment of VAT or how you account for VAT for the movement of goods between Northern Ireland and the EU.

You do not need any approval to account for import VAT on your VAT Return.

When you can account for import VAT on your VAT Return

You can do this if:

  • the goods you import are for use in your business
  • you include your VAT registration number on your customs declaration

When you must account for import VAT on your VAT Return

If you import goods that are not controlled into Great Britain from the EU between 1 January and 30 June 2021, you must account for import VAT on your VAT Return if you either:

  • delay your customs declaration
  • use a simplified customs declaration to make a declaration in your own records

You must make sure that when you complete the supplementary declaration you select that you will be accounting for import VAT on your VAT Return.

How to complete your customs declaration in order to account for import VAT on your VAT Return

When you complete your custom’s declaration you can select that you will be accounting for import VAT on your VAT Return.

If you use the Customs Handling of Import and Export Freight (CHIEF) system

On your declaration, you’ll need to enter:

  • your EORI number starting with ‘GB’ which includes your VAT registration number into box 8 (Header Consignee), or, if applicable, your VAT registration number in box 44h (Registered Consignee)
  • ‘G’ as the method of payment in Box 47e

If you use the Customs Declaration Service

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.