If a business imports art on a Temporary Bond with a shipper into the UK my understanding if the artwork is sold is that import VAT of 5% of the sale price is paid plus the duty to the shipper that holds the bond. My question is if the business sells the art to a UK client and the business is VAT registered does the business still charge the 20% on the sale as well as paying the 5% import VAT? Also is the 5% Import VAT claimable on a VAT return?
Thanks, Daniel
Hi Daniel,
Let's clarify the scenario and if I get something wrong, please, let me know.
So you have a business A which imports artwork under suspension of customs duties and import VAT. A is a UK vat registered business.
A is an importer and it is its obligation to pay duties and import VAT on any sold items.
A sells an artwork to a UK customer B. As a general rule A will need to charge UK vat on the sold item.
However, there is VAT marginal scheme should be available for artwork. I am not very familiar with this marginal scheme so you will need to read about it on HMRC's website.
In its vat return A will show the following:
Box 1 Output vat amount charged to B
Box 4. Import VAT paid to customs, provided it has a vat certificate
Thus import vat is paid as a result of importation of the artwork to the UK
and the UK VAT is charged because the sale of the artwork to a uk customer is a standard rated uk supply.