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Brexit – Importing / Exporting, Import Duty and Import VAT

Brexit has happened and we have been outside the EU from 1 January 2021.  Businesses who import from and export to the EU are well aware of this and are having to cope with new import / export procedures, import duty and import VAT.  There are resources available to assist businesses when trading with the EU.

Import / Export Procedures

HMRC have produced resources to answer questions businesses are raising. 

Short Videos

HMRC have produced some short videos to give you an outline on certain topics.

What you need to know to bring goods into the UK

What you need to know to send goods out of the UK

What are controlled goods?

Getting someone to deal with customs for you – how freight forwarders can help

Documentation

HMRC have produced a number of documents including a Checklist to assist with preparing to trade with the EU, support packs for exporting and importing goods from the EU, and flowcharts for importing and re-exporting union goods to the EU.

Webinars

HMRC are running webinars on understanding the new procedures for trading with the EU.  Some of these are pre-recorded and some of these need to be registered for but run at various days and times to allow you to chose when is best for you.

Exporting: What you need to do to keep your goods moving

What are customs import declarations?

Trader responsibilities when using an intermediary

Importing: What you need to know about Staged Controls

Import Duty

Import VAT may now be due on goods imported from the EU.  The default position is that if import duty is payable it is paid when the goods arrive in the country.  You can however elect to either defer the duty for later payment.

When you defer import duty, the amount due is added a Duty Deferment Account and the amount will be taken by Direct Debit once a month along with any other deferred import costs.  All costs will be made by one payment each month.  The type of Duty Deferment Account you need to apply for depends on your location in the United Kingdom and if you already have a Duty Deferment Account for imports from the rest of the world.  Detail on which Duty Deferment Account you require can be found here.

Import VAT

Import VAT is now due on goods imported from the EU.  The default position is that import VAT is paid when the goods arrive in the country and then VAT registered businesses reclaim this VAT on their next VAT return.  You can however elect to either defer the VAT or postpone the VAT.

Default Position

VAT registered businesses can claim back the import VAT they paid when the goods arrived in the country, on their next VAT return.  The VAT can only be claimed back with a valid C79 certificate issued by HMRC.  The C79 certificate lists the VAT you have paid on your imports.

How you receive your C79 certificate depends on how you make your customs declaration.  If you use the:

  • CHIEF system HMRC will send a C79 certificate to you each month in the post.
  • Customs Declaration System you will have to link your EORI number to a Government Gateway User ID (your existing User ID used for completing your VAT returns can be used) and download the C79 certificate.

Deferred VAT

Businesses can choose to defer the Import VAT in the same way they can defer the import duty.  The import VAT liability will be added to the business’ Duty Deferment Account and the amount will be taken by Direct Debit each month along with any other deferred import costs.

Businesses can the reclaim the import VAT using the C79 certificate detailed above.

Postponed VAT

Businesses can elect to postpone the import VAT when making their customs declarations.  This results in the import VAT never being paid. 

As the import VAT is never paid it cannot be claimed on the next VAT return however it still requires declaring of the VAT return.  This is achieved by including the import VAT that would have been paid in box 1 and 4 of the VAT return.  Box 1 is VAT payable and box 4 is VAT claimable therefore the amounts net off to £nil.  Businesses using the latest accounting software will be able to have their software account for this automatically if it is entered in the right way.  Should you require assistance with this please contact your Partner at CFW.

The amount of postponed VAT businesses should include on their VAT return is shown on a postponed VAT statement.  Postponed VAT statements are generated monthly and are accessed online.  You can link your existing Government Gateway User ID (your existing User ID used for completing your VAT returns can be used) to your postponed VAT statement by following the instructions on this webpage.

CFW Services

CFW has a VAT and bookkeeping department that continues to support clients through the ongoing changes to the VAT system (such as Making Tax Digital, Domestic Reverse VAT, Brexit).  We prepare VAT returns every month for our clients using our VAT and bookkeeping services and provide support and advice for all our clients on matters of VAT.  Please get in touch if you require any support or advice on Import VAT or any other VAT matter.

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