Following an initial issue with access to and accuracy of import VAT statements in January and February 2021, HMRC has identified a problem for those using simplified declarations for imports.
Postponed accounting for import VAT was reintroduced from 1 January 2021. This means that UK VAT registered businesses importing goods to the UK can account for import VAT on their VAT return, rather than paying import VAT on or soon after the time that the goods arrive at the UK border.
The information to make the required entries on the business’s VAT return should be obtained from any customs entries the business has made in its own records and copies of monthly postponed import VAT statement.
HMRC has now identified an issue with import VAT statements for those businesses authorised to use simplified declarations for imports.
Where a supplementary declaration is required, it should be submitted and accepted by HMRC by the fourth working day of the month after:
- a simplified frontier declaration is accepted;
- a customs clearance request is accepted; or
- an entry was made in the business’s records to release goods.
The entries on a supplementary declaration made at the start of the following month for goods imported in the previous month are currently being allocated to the wrong import VAT monthly statement.
While HMRC is seeking a solution to this problem, affected businesses can either:
- complete their VAT return using the figures on the import VAT statements; or
- if they can identify the incorrectly allocated entries, manually reallocate the figures to the correct monthly statement and use these adjusted figures to complete their VAT return.
More information:
- Guidance on completing VAT returns to account for import VAT (HMRC)
- Guidance on using simplified declarations for imports (HMRC)
- Guidance on making an import supplementary declaration (HMRC)
- Problems with import VAT statements (Tax News, 6 April 2021)
More support on tax
ICAEW's Tax Faculty provides technical guidance and practical support on tax practice and policy. You can sign up to the Tax Faculty's free enewsletter (TAXwire) which provides weekly updates on developments in tax.
Sign up for TAXwireJoin the Tax FacultyTax Faculty
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.
