Following Brexit, the UK started offering the import VAT postpone scheme. It allows businesses to postpone the import VAT by accounting for it in the entity’s VAT return. The scheme simplifies and speeds up the import procedure as companies do not need to pay VAT at customs and refund it later.
The possibility of postponing import VAT is available to UK-based and non-UK businesses with UK VAT certificates.
In order to proceed with the postponed VAT scheme, a business has to have a UK VAT number. If the company originates from a non-EU country, the customs declaration has to be filled by a representative – a declarant. This person should be noticed of the intention to use the postponed import VAT scheme.
To fill in the postponed VAT, a company needs to download the monthly import VAT statement and simply reflect the imports in VAT returns.
The import VAT should be recorded and submitted at the same frequency as the assigned VAT periods. It means that the business paying VAT quarterly should submit the postponed import VAT quarterly, too. Please keep in mind that currency conversation rates for calculating the value of imported goods should be tracked monthly.
In the typical scenario, imported goods for a taxable sale do not generate any VAT if the company shows output VAT in the same reporting period. However, different scenarios might apply if the deemed supplier scheme is used.
Do you need help with handling your international VAT? Vatabout team is here to help you and your business.