Global VAT Compliance

From 1 January 2021, VAT registered businesses importing goods into the UK will have a choice to have their import subject to the postponed account scheme and therefore taxpayers will not pay import VAT and then recover it later in their VAT return, as they use to do with the normal system where import VAT was due and later one deducted upon receiving the form C79 document.

  “Postponed Accounting for import VAT” is to be introduced which provides a cashflow benefit.  The import VAT is never paid to HMRC at the time of import but rather it is declared as output tax and claimed as input tax on the next VAT return, assuming that the importer is fully taxable.  The current paper C79 monthly certificate issued by HMRC as evidence of import VAT paid is will stay in place and but the new online system, which produces a “postponed import VAT statement” will have a significant cash-flow benefit for the clients. 

Both “Postponed Accounting for import VAT” and C79 documents will be available in the online CDS = Customs Declaration Service system. 

All clients who import in the UK must be enrolled to CDS and their statements must be downloaded before calculating the VAT return. 

More specifically: “Postponed Accounting for Import VAT” provides a cashflow benefit where the Import VAT is never paid to HMRC at the time of import but rather it is declared as output tax and claimed as input tax on the next VAT return, assuming that the importer is fully taxable.