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Entitlement to recover Import VAT has changed from 15 July 2019

Deeks VAT News

Keeping you up to date on VAT changes

 Welcome to a special edition of Deeks VAT News.

Entitlement to recover Import VAT has changed from 15 July 2019

HMRC has issued Revenue & Customs Brief 02/19 which ‘clarifies’ its policy with regards to who/which entity is entitled to import goods and reclaim the associated import VAT.

Before the 15 July 2019, HMRC has permitted a ‘person’ who does not own the goods at the point of entry into the UK to act as the ‘importer of record’. The declaration at the port of entry then generates the import VAT certificate (C79) which supports the import VAT reclaimed by the importer of record.

Whilst HMRC has historically accepted this position, as of 15 July 2019, only the legal owner of the goods will be entitled to reclaim the VAT paid when goods are imported.

This significant change will impact the following situations:

  • Where a business purchase goods from outside the EU and ownership passes when the goods are paid for, but the business acts as the importer of record.
  • Foreign businesses that sell goods to UK customers and own the goods until delivered in the UK/paid.
  • Foreign businesses that supply UK subsidiary with goods.

The owner of the goods will now be responsible for the importation of those goods and the reclaim of import VAT, which could affect cash flow, the price you will pay, and potentially disrupt your supply chain if goods are delayed.

HMRC has confirmed that it will not seek to assess retrospectively where the declarant was the ‘importer of record’ rather than the owner of the goods provided full VAT recovery was available. If you have been assessed within the last four years, it may be appealable based on this revised policy.

In light of this change, we recommend that contracts and processes should be reviewed to avoid unnecessary costs and delays.

For more information, please click on the link to Brief 02/19 below:

https://www.gov.uk/government/publications/revenue-and-customs-brief-2-2019-vat-import-vat-deducted-as-input-tax-by-non-owners

We trust that you will find this of interest. If you would like to discuss how this change will affect your client’s business, please do contact Deeks VAT Consultancy who will be happy to help.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Please note that Deeks VAT News is not intended to be a comprehensive guide to every development in VAT. It should not be used as a substitute for specific advice in individual circumstances. Deeks VAT Consultancy Limited cannot accept any liability for any action/inaction as a result of any reliance on Deeks VAT News’s contents.

 

Deeks VAT Consultancy Limited

Managing Director: Jane Deeks LLB (Hons) LPC CTA

T: 07710 553831        E: jane@deeksvat.co.uk        W: deeksvat.co.uk

 

 

 

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