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UK import VAT clarification

  • Apr 16, 2019 | Richard Asquith

The UK’s HMRC has provided guidance on who can reclaim or deduct import VAT on goods entering the UK from outside the EU. Post-Brexit, this will include goods coming from the remaining EU 27 states.

HMRC has clarified that only the importer of record may reclaim any import VAT paid. This should be the owner of the goods. HMRC had identified two situations where this rule is not being followed:

  1. Toll operators who import and distribute goods for their customers. They do not take legal ownership of the goods. They do pay the import VAT, but this does not entitle them to use that as a deduction in their own VAT liability. Their customer should reclaim the VAT either through their UK VAT registration or a 13thDirective VAT reclaim.
  2. Sales before importation, where the vendor makes a sale immediately before they import the goods and make them available to their customer once cleared into the UK.

In both the above cases, the import VAT certificate, C79, has listed the importer of record wrongly. It should be the owner of the goods who should have been declared on the C79.

HMRC will allow affected companies until 15 July 2019 to make appropriate amendments to their systems.

Need help with your UK VAT compliance?

Researching UK VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade. 

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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