Getting your VAT Returned

Do you remember this quote? It came from Benjamin Franklin: "Certainty? In this world nothing is certain but death and taxes."

Well, taxes are indeed a certainty, but you may not realise that if you're a business based in the European Community, and you import for destinations in Europe via the UK, you can reclaim the VAT you pay on import to the UK - and that's whether you're based in the UK, or anywhere else within the EC.

Customs Clearance Ltd in the UK acts as 'European Gateway' for businesses importing to Europe. We handle inbound shipments, including processing through customs, paying duty, warehousing and even break bulk and onward shipping to multiple destinations. We help make your life easier by navigating and advising on the complexities of customs, importation, duty and VAT.

Customs Clearance via CHIEF

First things first. If you are registered for VAT in the UK you will need a TURN (Trader's Unique Reference Number) to enable your inbound commercial shipments to be cleared through the automated customs import/export processing system CHIEF. This is made up of your VAT number, plus a further 3 digits. If you are registered for VAT elsewhere in the EC, you will need what's known as a Pseudo TURN number - more of which, below.

Paying VAT on Imports

When importing to the UK, or via the UK into other EC countries, VAT is payable on all imports at the same rate. If you are registered for VAT in the UK and you import goods from inside the EC, you enter the VAT details on your VAT Return as 'acquisition tax'. If importing via the UK from outside the EC, you must also declare and pay VAT on all imports but in this instance, it is the Single Administrative Document (SAD) that is used, and import VAT and duty will need to be paid before HMRC releases your goods. If you're a regular importer, you can defer paying import duty and VAT by around 30 days, by setting up an account with HMRC.

Reclaiming VAT on Imports

If you're registered for VAT in the UK: In general, you can reclaim the import VAT that you've paid for business goods. The normal evidence of payment of import VAT is the import VAT certificate (Form C79), which is issued monthly. If you are registered for VAT in the UK and importing from the EC, reclaiming the VAT paid on EC imports occurs via your VAT return for the period during which the goods were imported, just as if the goods were supplied in the UK. If your imports from the EC exceed an annual amount (currently £233,000) you may need to complete a supplementary declaration. In both instances, you must be the direct consignee and not the middle handling import agent.

If you're registered for VAT elsewhere in the EC: If you are registered for VAT in any of the Member States of the EC, you can reclaim VAT paid in the UK provided that you:

are not registered, liable or eligible to be registered in the UK
have no place of business or other residence there and
do not make any supplies there (other than transport services related to the international carriage of goods).

In the first instance you will need to have obtained a reference number called a Pseudo TURN (Trader's Unique Reference Number). In addition to enabling your imports to be processed through the automated CHIEF system, this reference number acts by way of a substitute for your local VAT reference number. You can apply for a Pseudo TURN via form C219, downloadable from the HMRC website.

There is no maximum amount that you can claim back, but each EC Member State has a minimum refund amount, and there are regulations governing the periods for which you can claim.

Claims forms must be submitted with all the information needed to process the claim, including invoices, the VAT copy of the import entry or other customs document showing the amount of VAT that you have paid and, if applicable, a certificate of status from your tax authority, showing that you are registered there for VAT. You will receive your refund of VAT paid in the UK within 6 months of claiming.

Acting as your Agent

VAT, duty and importation regulations are without doubt complex matters, and we have scratched the surface simply to pass on a few pointers. Engage CCL as your Agent to deal with all matters of customs and importation and we will be able to take care of all processing and payment matters on your behalf. We can advise you, assist with applications and forms completion and, of course, help you with your customs declarations. We can help ensure your shipments are processed in the shortest timeframes, and in the most advantageous way for your business, and that all the processes are in place to enable you to minimise your import/export financial burdens.

Finally, you will of course find detailed information on VAT and import duty and the ins and outs of importing and exporting on the HM Revenue & Customs web site at www.hrmc.gov.uk. For specific advice in relation to your own business, you can also call the HMRC National Advice Service on 0845 010 9000.

+44 (0)20 8231 0900

Getting your VAT Returned

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