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When the transition period ends on 31 December 2020, imports from countries in the EU will be subject to the same VAT rules as imports from suppliers in the rest of the world.

 


Import VAT

From 1 January 2021, the way that we pay import VAT is changing. The University will be using its VAT return to account for import VAT on goods from all overseas suppliers. This is known as postponed VAT accounting (PVA).  When instructed by us, import agents/carriers will no longer have to pay import VAT on our behalf when goods enter the UK. The University Tax Team has already confirmed to DHL and FEDEX that the University wishes to use PVA and standard customs procedures. 

Departments should confirm that PVA is to be used when instructing import agents and that standard customs declarations are to be used (NOT deferred declarations).

See Appendix A for suggested wording.

PVA is effectively the same process that we have been using for the collection of Acquisition Tax on goods imported from the EU, which is now being extended to all imports regardless of where they are from (with the exception of Parcel consignments worth £135 or less.  This will mean that the import agent’s/carrier’s invoice will no longer include a line for import VAT paid at the border on our behalf.

From 1 January 2021, departments should:

  1. Use the IMPORT20%, IMPORT5%, IMPORT0% or ME0.0% tax codes for all purchases of goods from overseas suppliers.

  2. Confirm with import agents/carriers that we will use PVA - give them our VAT registration number and/or EORI number.  We will account for the import VAT on our VAT return (using PVA).

  3. Instruct the import agents/carriers that we wish to use existing customs processes to complete a standard customs declaration at point of entry. Do not use the 6 month deferred customs declaration option.
     

Tax codes for goods purchased from overseas from 1 Jan 2021  

The VAT rate of goods if they had been purchased in the UK.…

Tax code to use on POs for goods from overseas suppliers

Standard rated (SR20.0%)

IMPORT20% 

Reduced Rate (RR5.0%)

IMPORT5%

Zero-rated (ZR0.0%)

IMPORT0%

Exempt (EXEMPT)

NO UK VAT

Medically Exempt (ME0.0%)

ME0.0%

OUTSIDE THE SCOPE (overseas VAT charged)

NO UK VAT

 

Goods from outside the EU, imported up to 31 December 2020

Any goods from outside the EU imported up to 31 December 2020 will be subject to import VAT at their point of entry. The University’s import agents/carriers will continue to pay this on the University’s behalf and re-charge it to the University, alongside any duty charges and the fee for their services. These agents’/carriers’ invoices should be processed per the current guidance (link above) and the subsequent invoice from the overseas supplier processed with the tax code of NO UK VAT.

 

Goods from outside the EU, in transit - straddling 31 December 2020 and 1 January 2021

If a declaration is made on or after 1 January 2021, then the import VAT should be postponed, and our import agents/carriers will not need to pay this on the University’s behalf. Therefore, when the invoice from the supplier is received please cross-check this against the agent’s/carrier’s invoice and if no import VAT has been paid on our behalf, please code the supplier’s invoice to the appropriate IMPORT tax code when processing in Accounts Payable

 

Goods from inside the EU, in transit straddling 31 December 2020 and 1 January 2021

As above, where a movement of goods has started before 31 December 2020 and ends after 1 January 2020, please ensure that it is coded to the relevant IMPORT tax code. .  If any customs duty is charged on the agent’s/carrier’s invoice, this should be coded to the same IMPORT VAT code as the goods.

 

Goods from outside the EU, already ordered that are imported after 1 January 2021

Where goods have already been ordered from suppliers outside the EU using the tax code NO UK VAT, but are subsequently imported post 1 January 2021, please ensure that the tax code used for the supplier’s invoice is changed at the Accounts Payable stage to the appropriate IMPORT tax code and that any customs duty included on the agent’s/carrier’s invoice is coded to the same IMPORT tax code.
 

Goods from outside the EU, where a pre-payment /deposit /stage payment was made prior to 1 January 2021

Import VAT is due on the full value of the goods. Please contact the Tax Team with details so we can ensure that the full VAT value is captured for the VAT return.

 

 

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UFS issued communications and the University website also contain information on this topic

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