Brexit: Accounting for Import Tax on Your VAT Return

24 December 2020

From 1 January 2021, if your business is registered for VAT in the UK, you’ll be able to account for import VAT on your VAT Return.

Postponed accounting will be introduced to allow to a phased implementation of the customs declaration until 30 June 2021.

This would mean that when the goods enter the UK, you make a simplified declaration, but you don’t have to pay the import duty at this point. 

You must make a supplementary declaration within six months, and this is when the duty becomes payable. 

The import VAT should be accounted for on your next VAT return. 

If you are not registered for VAT, you must pay the import VAT when you make the supplementary declaration.

To apply for the simplified declaration, you will need to have a duty deferment account and a Customs Handling of Import and Export Freight (CHIEF) badge and software that is compatible with CHIEF. You can apply to use the simplified declarations for imports here

If you do not have a Duty Deferment Account you can apply for one here, it will enable you to pay all customs charges once a month by Direct Debit instead of being paid on the individual consignments.

Find out what else is changing here.

If you have any questions regarding the above, please don’t hesitate to contact us.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Brexit: Accounting for Import Tax on Your VAT Return

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