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Where Taxpayers and Advisers Meet

Vat advice on Importing from outside of EU

Pedro123
Posts:1
Joined:Tue May 22, 2018 11:32 am
Vat advice on Importing from outside of EU

Postby Pedro123 » Tue May 22, 2018 11:41 am

A vat scenario I am looking for assistance with

I have a new customer in the UK who I am looking to sell manufactured goods to from my supplier in Asia

I get the goods made and shipped directly to my customer – my customer pays me, I pay the supplier

I will get paid in 4 stages before the goods are shipped (30/30/30/10%)

The scenario;

1. I WIN AN ORDER FOR £250,000
2. I INVOICE CUSTOMER 30% OF TOTAL IN JANUARY – I PAY VAT ON THIS TOTAL IN THIS VAT QUARTER OF £15,000
3. I INVOICE CUSTOMER 30% OF TOTAL IN MAY – I PAY VAT ON THIS TOTAL IN THIS VAT QUARTER OF £15,000
4. I INVOICE CUSTOMER 30% OF TOTAL IN SEPTEMBER – I PAY VAT ON THIS TOTAL IN THIS VAT QUARTER £15,000
5. I INVOICE CUSTOMER 10% OF TOTAL IN JANUARY – I PAY VAT ON THIS TOTAL IN THIS QUARTER £5,000

I have paid the above VAT in total of 20% (£50,000) over a the manufacturing period
I have paid the Asian supplier, I now ship the goods…..

6 weeks later the goods arrive at Felixstowe, I declare the goods value of £250,000
HMRC request me to pay 20% VAT (£50,000) before goods are released, in this case I will have paid VAT twice.

How can I reclaim the VAT in this instance?

Thanks in advance

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: Vat advice on Importing from outside of EU

Postby AdamS93 » Tue May 22, 2018 12:54 pm

You haven't paid VAT twice.

Your customer has paid once, and you will pay once.

Recovery of import VAT follows the normal rules with one major exception - you will need a C79 as evidence to recover the VAT.

les35
Posts:635
Joined:Wed Aug 06, 2008 3:09 pm

Re: Vat advice on Importing from outside of EU

Postby les35 » Tue May 22, 2018 2:26 pm

Are you registered for VAT in the UK?


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