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Where the University imports goods from overseas and the seller sends them as a parcel in the post and the consignment is valued at less than £135 (exclusive of VAT), the way in which import VAT is paid is changing.

From 1 January 2021, VAT will no longer be due at the border.   

What is the significance of £135? 
It is the threshold for customs duty purposes meaning that no customs duty will be due on these parcels – however, customs declarations are still needed. 

Actions for departments

1.  Provide the Supplier with the University’s VAT registration number
This provides proof to the seller that we are a business customer. This is particularly important where a purchase order has not been raised for the goods including any purchases on the University corporate credit card.

University’s VAT registration number:   GB 823 8476 09  

Where the University has provided its VAT registration number to the seller, the import VAT will be accounted for by the University on its UK VAT return using a new procedure called Postponed VAT Accounting (PVA).  

2.  Code the order, invoice, or receipt to the appropriate IMPORT tax code
This will be most commonly IMPORT20% or ME0.0% and ensures that the correct PVA procedure is used. 

For further details please see HMRC guidance:
https://www.gov.uk/government/publications/changes-to-vat-treatment-of-overseas-goods-sold-to-customers-from-1-january-2021  

Q. What if no VAT number is provided at the point of sale?

Sellers are liable to register for VAT in the UK for any supplies made directly to non-business customers and then charge domestic UK VAT, as if they made the supply in the UK. This should be coded to SR20% on CUFS rather than import VAT.

Q. What if I am buying items off overseas suppliers through the Marketplace in iProcurement?

As the University’s VAT number is automatically provided when the purchase order is transmitted, you should not be charged VAT on parcel consignments of less than £135. Select the appropriate IMPORT tax code on CUFS when raising the order and processing the invoice. 

Q. What if I am buying goods off other online marketplaces?

Remember to provide the University’s VAT registration number when you order the goods. You will not then be charged VAT on the consignment and instead you should select the appropriate IMPORT tax code when processing the transaction.  

Where our VAT number is not provided, the online marketplace involved in facilitating the sale will be responsible for collecting and charging you UK VAT on the goods. 

Q. What about consignments valued above £135?

Q. Does this apply to goods sent between Northern Ireland and Great Britain?

No, these are subject to special rules – see https://www.finance.admin.cam.ac.uk/Brexit-goods-involving-Northern-Ireland 

CORONAVIRUS/COVID-19
FOR STAFF

Please see our CORONAVIRUS/COVID-19 Assistance pages for help with areas of Finance during the current situation.

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

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