United Kingdom: HMRC Import VAT Updates

The HMRC has issued guidance on who can recover import VAT on goods entering the UK from outside the EU. Post-Brexit, this will include goods coming from the remaining EU 27 states.

The HMRC also explained the correct treatment for the deduction of import VAT paid by a taxable person who is not the owner of the relevant goods (e.g. toll operator or agents).

HMRC has made it clear that only the importer (or the owner of the goods) may reclaim any import VAT paid.

HMRC had identified two situations where this rule is not being enforced:

  1. Toll operators – toll operators import and distribute the goods to their customers but they do not take legal ownership of the goods. Toll operators are to pay import VAT but this does not entitle them to use that as a deduction in their own VAT liability as the toll operator is not the owner of the goods. The owners of the goods are the customers and they should reclaim the VAT either through their UK VAT registration or a with a 13th Directive VAT reclaim.
  2. Sales before importation – Where a business sells the goods just before importing them into the UK so the ownership title has passed to the new owner. The correct procedure is for the new owner of the goods to reclaim the import VAT on the C79 (the import VAT certificate required for the deduction of the import VAT) and not the previous owner.
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In both, the above cases, the C79 import VAT certificate, should declare the owner of the goods. HMRC accepts that as previous guidance was not clear and they will not pursue historical VAT deductions. HMRC will give affected companies until 15 July 2019 to make appropriate amendments to their systems.

The HMRC are releasing VAT updates at an alarming rate, particularly regarding the future post-Brexit and in regards to the Making Tax Digital Regime. Make sure you’re subscribed to the Taxback International blog so you never miss an update,

If you are unsure of how these changes and updates may impact you, please feel free to contact Taxback International on

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