Imports ― postponed accounting for import VAT

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note looks at when a business is entitled to account for import VAT under postponed accounting.

For importing goods from outside the UK generally, see the Imports ― overview (rules from 1 January 2021) guidance note. For movements of goods and Northern Ireland, see the Northern Ireland ― overview guidance note.

In-depth commentary on the legislation and case law can be found in De Voil Indirect Tax Service V3.305.

What is postponed accounting?

Postponed accounting is designed to address the cash flow issues that would arise for many businesses if they were obliged to pay import VAT at the point that they import goods into the UK.

In essence, postponed accounting allows a business to account for import VAT via its VAT return rather than at the point that goods come into the UK. If a business is entitled to full VAT recovery, this is effectively an administrative entry; the import VAT is accounted for but it is immediately recovered on the same VAT return. Consequently, a cash flow cost

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