Postponed VAT Accounting

Date: 26th January 2022  |  Author: Sean Toomer

What’s this new Postponed VAT on Imports that Customs keep telling me about?

Postponed VAT accounting might seem like another complicated process that HMRC have put together just to make life more confusing, but this scheme is actually a pretty good one.

Using postponed VAT accounting means that UK VAT registered businesses (that’s you) can account for and recover the import VAT on the VAT return instead of paying for the import VAT upfront.

This just means that instead of making the payment for import VAT, instead this will go on the VAT return as an in and out transaction, no payment needed.

How to Register?

There is no registration process to use this scheme, and it is often automatically applied but if not, you will just need to put it in your customs declaration that you will be using postponed VAT accounting.

When using the CHIEF system you will just need to enter in your declaration, your EORI number in box 8 (if you don’t have an EORI number, you can get one here) and your VAT registration number in box 44h and put ‘G’ as the method of payment in box 47e.

If you use CDS on your declaration you will need to include your VAT registration number at header level in data element 3/40.

What about putting this on my VAT Return?

So that’s the first half of it, next this needs to be recorded on the VAT return. So, provided that you don’t defer your customs declarations, you just need to login to the Customs Declaration Service and get a copy of your monthly postponed VAT statements.  You can get your login here.

These statements are then used and added to the VAT return as shown below (this is just in case you are interested in this sort of thing as we take care of this for clients).

Box 1

Include the VAT due in this period on imports accounted for through postponed VAT accounting. You’ll be able to get this information from your online monthly statement, or you must estimate the amount if you’ve delayed your customs declaration and do not have a statement.

Box 4

Include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting. You must estimate the amount if you have delayed your customs declaration and do not have a statement.

Box 7

Include the total value of all imports of goods in this period, not including any VAT

And it is as easy as that. No more paying upfront VAT on imports!

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