United Kingdom

Large-Value Imports to the UK: How to Pay VAT?

May 31, 2024
Large-Value Imports to the UK: How to Pay VAT?

Brexit led the UK to come up with a new scheme known as the import VAT postpone scheme. Under this progressive initiative, organizations can defer the payment of import VAT by adding it into their VAT return— an action that further simplifies and quickens the import process apart from obliterating paying VAT at customs and then seeking reimbursement.

Import VAT payment postponement can be accessed by companies regardless of their UK location and non-UK firms holding UK VAT certificates.

A business needs to have a UK-issued VAT number to move ahead with the delayed VAT scheme. For a non-EU based company, a customs declaration needs to be completed; this duty falls upon a declarant who acts as a designated representative. It is important that this individual is informed about the decision to use the postponed import VAT scheme.

To address the delayed VAT, companies need to initially download the monthly import VAT statement and ensure proper inclusion of imported goods in their VAT returns.

Do not forget this: the import VAT must be detailed and filed neatly following the assigned VAT periods. This means that if a business is supposed to pay VAT every quarter, then also the postponed import VAT has to go on a quarterly basis. Moreover, do not forget about monthly tracking of currency conversion rates— these help determine actual value for the goods coming into your possession. By being keen to these rules, business will make sure that they have their duties in a timely manner and with exactitude.

Generally speaking, when imported items are traded and taxed, the company need not pay additional VAT if it already offsets output VAT against input VAT in the same tax period. Nevertheless, one should be aware that opting for the deemed supplier scheme can lead to other situations— thus making it a topic worthy of more detailed study.

Best Regards, Vatabout team