Hello

Would anybody know what the situation is with VAT reporting (and payments/refunds etc.) when importing from the far east.

I understand that when the goods arrive the VAT and duty is payable to HMRC (normally via the shipping company deferment account).

I receive an invoice for this, which I report in my accounts as input VAT (have I got this round the right way??!)

I am working on a cash accoutning basis.

When I submit my quarter figures, and I have no output VAT (or the customers have not yet paid) and the only VAT transaction is the VAT paid to HMRC, will HMRC pay back the VAT I have paid when the goods cleared?

Thanks in advance for any info.
Cheers
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Yes, you'll receive the money back from HMRC as shown on box 5 of your VAT return.
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hopefully not a silly question, but are you VAT registered?

Make sure you get the C79 cert from HMRC, because if you do not and you have an inspection, they will probably challenge the claim!
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Would anybody know what the situation is with VAT reporting (and payments/refunds etc.) when importing from the far east. I understand that when the goods arrive the VAT and duty is payable to HMRC (normally via the shipping company deferment account).

Correct.

I receive an invoice for this, which I report in my accounts as input VAT (have I got this round the right way??!)

Not (necessarily) correct. You can only reclaim the Import VAT (which is also input VAT) if you have a relevant document to prove you have paid the UK Import VAT. Unless you are IOM VAT registered, this is a C79 (a bluey-greeny document, very pretty!).

If this is not addressed to your business using your VAT registration number, you need to contact the transporter and then HMRC, to let both know that the import VAT is due to you and not to the transporter.

Only the party named on the C79 can reclaim the Import VAT, even if your transporter is acting as your agent.

I am working on a cash accoutning basis.

This means you can reclaim the input Import VAT when you have paid it.

When I submit my quarter figures, and I have no output VAT (or the customers have not yet paid) and the only VAT transaction is the VAT paid to HMRC, will HMRC pay back the VAT I have paid when the goods cleared?

Correct. HMRC are entitled to query the reclaim and ask for evidence to support the fact you are in business and evidence of the VAT paid. Usually an invoice will suffice. In this case, HMRC are likely to want to see the (correctly addressed) C79 too.

Hope it helps & good luck!
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Many thanks for the replies.. much appreciated.

I am VAT registered. When goods are shipped by the suppliers I am ensuring the consignee on the B/L, and the commercial invoice and packing list is completed with my company details. When the shipping company is notified I ensure they clear the goods with my company details and my VAT number (using their deferment account).

So far so good. I just want to make sure that that paying import VAT and using the cash accounting scheme go hand and hand, and I will not fall foul of some regulation HMRC has.

Cheers
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OK, I understand your query now.

You can indeed reclaim import VAT whilst also using the Cash Accounting scheme for other transactions (including the onward sale in the UK of the imported goods). But as I stated above, you must have the C79 document. This is because the importation is technically outside the Cash Accounting scheme and you are actually accounting for the importation based on the C79 document.

Below (in bold) is an extract from HMRC's VAT Notice 731, Section 5.5:

The following text has force of law: "You cannot use the cash accounting scheme for goods you import, acquire from a business registered in another EC Member State or remove from a Customs warehouse or free zone."

You must account for VAT on such purchases under the normal VAT rules as explained in Notice 700 The VAT Guide. You can, however, use the scheme to account for VAT on the onward supply of such goods.

Full details of the VAT import and warehouse requirements are in Notice 702 VAT: Imports.

All these VAT Notices are available on HMRC's website, though you might be best advised to search in Google, then choose the "HMRC" hit - it's usually quicker!

Hope it helps deepen your understanding, and good luck.
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