The following Value Added Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
This guidance note looks at when a business is entitled to account for import VAT under postponed accounting.
For importing goods from outside the UK generally, see the Imports ― overview (rules from 1 January 2021) guidance note. For movements of goods and Northern Ireland, see the Northern Ireland ― overview guidance note.
In-depth commentary on the legislation and case law can be found in De Voil Indirect Tax Service V3.305.
Note that issues have been reported with postponed accounting statements in 2021. For details, see Complete your VAT Return to account for import VAT.
Postponed accounting is designed to address the cash flow issues that would arise for many businesses if they were obliged to pay import VAT at the point that they import goods into the UK.
In essence, postponed accounting allows a business to account for import VAT via its VAT return rather than at the point that goods come into the UK. If a business is entitled to full VAT recovery, this is effectively an administrative entry; the import VAT is accounted for but it is immediately recovered on the same VAT return. Consequently, a cash flow cost is avoided.
Postponed accounting was introduced from the end of the Brexit implementation period. VAT-registered businesses can account for import VAT under postponed accounting (without a requirement for authorisation of any kind) where:
goods are imported for use in the business
the business includes its VAT registration number on its customs declaration
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