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VAT – Imports

Q: Last month my client bought some EU-manufactured furnishings for circa £10k from an EU supplier on FOB terms and, as expected, was not charged VAT by the supplier on the basis my client would be responsible for the UK import. Normally the freight carrier would request the import VAT from my client, but on this occasion they have not. Is this right? Surely my client should have paid some VAT on these items? The goods were not imported under any special customs regimes or reliefs.

A: Import VAT on consignments of this size and nature would normally have to be a) paid immediately by client or its agent to release the goods; b) paid the following month via the client's or its agent's deferment account; or c) accounted for by the client under the (new from Jan 21) Postponed VAT Accounting (PVA) procedure on its next VAT return (Boxes 7 and 1 and any recoverable VAT in Box 4). Given the client has not paid anyone any VAT, it seems likely that the agent ticked the relevant boxes to trigger PVA for the client. The best way to check this is to ask the freight agent to confirm what was done & / or get a copy of the import declaration. If the agent correctly used the client's GB EORI number on the import declarations as the consignee / owner of the goods and PVA was triggered, HMRC should issue an MPIV statement to your client; this will quantify the amount of VAT that needs to be accounted for and also serve as evidence for input tax recovery. The client will need to register for and log in to HMRC's CDS system to periodically download these as HMRC only keep them on there for 6 months.