Imports in a nutshell
Broadly speaking, the term ‘import’ in a VAT sense refers to goods entering the UK from another country. In general, import VAT is due on goods imported into the UK. Import VAT is not, however, applicable in all circumstances.
When is import VAT not due?
Import VAT is not due when the goods being imported are intrinsically zero-rated – for example, food and children’s clothing.
There are also special rules for certain imports in consignments of £135 or less which are subject to UK VAT at the point of sale.
In addition, import VAT due may be suspended or relieved under certain conditions – for example, where the goods are to be subject to a warehousing procedure.
What about Northern Ireland and imports?
Special rules apply in respect of movements of goods involving Northern Ireland owing to its status under the terms of the Brexit Withdrawal Agreement.
What declaration requirements are there for imports?
Imported goods must generally be the subject of an import declaration – this is normally made at the time of importation (subject simplified measures which apply from 1 January 2021 to 30 June 2021).
How is import VAT collected / accounted for?
For VAT-registered businesses, import VAT is generally accounted for under the postponed VAT accounting system from 1 January 2021.
Under postponed accounting businesses are required to enter the VAT due as output tax on their VAT returns and may simultaneously recover it as input tax, subject to any restriction in respect of partial exemption, or in relation to goods on which input tax recovery is blocked.
In the event that postponed VAT accounting system is unavailable or not used for any reason, a deferment procedure is available under which import VAT (and import duty) is collected by HMRC between two and six weeks after import.