Import VAT on goods I buy from outside the UK — how do I account for it on my VAT return?

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Import VAT on goods I buy from outside the UK — how do I account for it on my VAT return?

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Hi everyone, I'm Hazel — a freelance designer working as a sole trader, and I'm VAT-registered. I regularly order design materials and tech gear from suppliers outside the UK, and I keep seeing import VAT on my customs paperwork.

I'm not quite sure where this goes on my VAT return. Do I just include it in my input VAT, or is there a separate process like postponed VAT accounting that I should be using? I don't want to double-count anything or miss a box on the return.

Any guidance on the right way to record it would be really appreciated.

Tagsimport vat vat return postponed vat accounting

Answer 1

DDasiy Smith

Hi Hazel, great question — this is a really common source of confusion. If you use postponed VAT accounting (PVA), you don't pay the import VAT at the border at all; instead you declare it on your VAT return by adding it to Box 1 (output VAT due) and reclaiming the same amount in Box 4 (input VAT), provided the goods are for your taxable business — so it nets off and there's no cash cost. You get the figures from your monthly postponed VAT accounting statement, which you download from your business tax account using your EORI number. Do check that your freight agent or customs declarant has elected PVA on each customs declaration, because it isn't automatic. If PVA wasn't used, the import VAT you paid will appear on a C79 certificate instead, and you reclaim it through Box 4 in the usual way. Either way, keep the customs declarations and statements with your VAT records so everything reconciles and there's nothing double-counted.

Import VAT on goods I buy from outside the UK — how do I account for it on my VAT return?

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