If your business imports goods into the United Kingdom from overseas, you may be entitled to reclaim the import VAT incurred on those goods.

For UK VAT-registered businesses, import VAT can generally be recovered through the UK VAT return, provided the goods are used for eligible business activities and the necessary supporting documents are available.

The procedure depends on whether you paid import VAT at customs or used Postponed VAT Accounting (PVA).

This article explains how to reclaim UK import VAT, what documentation you need, and how Hellotax can support your VAT compliance.

What Is UK Import VAT?

Import VAT is charged when goods are imported into the UK and released into free circulation.

The principal UK VAT rates are:

• Standard rate: 20%
• Reduced rate: 5% for qualifying goods
• Zero rate: 0% for qualifying goods

The applicable rate depends on the type of goods imported.

Import VAT is generally calculated using the customs value of the goods, together with applicable customs duties and certain additional costs.

Import VAT is separate from customs duty. Customs duty cannot be reclaimed as input VAT.

Who Can Reclaim Import VAT?

Your business may be entitled to reclaim import VAT if:

• It is registered for UK VAT.
• It is the importer of the goods and has the necessary import documentation.
• The goods are imported for use in its taxable business activities.
• The import VAT is deductible under the normal UK input VAT rules.
• The VAT has been correctly accounted for or paid.

If goods are used for both taxable and VAT-exempt activities, the recoverable amount may be restricted.

Important: Being charged import VAT does not automatically mean it can be reclaimed. The business must establish its entitlement to deduct the tax.

Method 1: Reclaiming Import VAT Paid at Customs

If your business pays import VAT when goods enter the UK, it can normally reclaim the eligible amount through its UK VAT return.

Step 1: Obtain Your Import VAT Certificate (C79)

HMRC issues a C79 import VAT certificate, which provides evidence of import VAT paid.

You should:

1. Access the relevant HMRC import VAT certificate service.
2. Download the C79 certificate for the applicable month.
3. Check that the import VAT amounts match your customs and accounting records.
4. Retain the certificate for your VAT records.

C79 certificates are generally available monthly.

A freight forwarder's invoice or proof of payment alone is not normally a substitute for the required import VAT evidence.

Step 2: Record the Import VAT

Record the deductible import VAT in your accounting records, supported by the relevant C79 certificate.

Check that the import relates to your business and that the amount has not already been claimed.

Step 3: Reclaim the VAT Through Your VAT Return

Include the eligible import VAT in:

• Box 4: VAT reclaimed on purchases and other inputs.

Also ensure the value of the imported goods is correctly reflected in the VAT return, including Box 7 where applicable.

The amount reclaimed contributes to your overall VAT return position.

Method 2: Reclaiming Import VAT Using Postponed VAT Accounting (PVA)

Postponed VAT Accounting allows eligible UK VAT-registered businesses to account for import VAT directly on their VAT return rather than paying it upfront at customs.

This can provide a significant cash-flow advantage.

Step 1: Use PVA on Your Customs Declaration

Your customs declaration must indicate that postponed VAT accounting is being used.

Your customs agent or freight forwarder should receive clear instructions to apply the correct method.

Step 2: Download Your Monthly PVA Statement

HMRC provides monthly postponed import VAT statements.

These show the import VAT postponed during the relevant period and provide evidence to support your VAT return.

Step 3: Report the Import VAT on Your VAT Return

Complete the relevant boxes as follows:

If your business is entitled to recover all the import VAT, the Box 1 and Box 4 entries will normally offset each other.

Example

Your business imports goods with £2,000 of postponed import VAT.

• Box 1: £2,000 VAT due
• Box 4: £2,000 VAT reclaimed
• Net import VAT effect: £0

This assumes the full amount is deductible.

The import VAT must be reported in the VAT period covering the import date, even if the monthly statement is not yet available.

What Documents Should You Keep?

Depending on the method used, retain:

• C79 import VAT certificates or monthly PVA statements
• Customs declarations and import entry references
• Commercial invoices from suppliers
• Freight and shipping documents
• Import VAT payment records, where applicable
• Accounting records supporting the VAT deduction

Make sure your business's EORI and VAT details have been used correctly on the customs declaration.

Common Import VAT Reclaim Problems

The C79 Certificate Is Missing

Check your HMRC customs account and confirm that the correct importer and EORI details were used.

The Customs Agent Paid the Import VAT

Payment by an agent does not automatically prevent recovery, but your business must still establish its entitlement and hold appropriate supporting evidence.

Import VAT Was Claimed Twice

Do not reclaim the same VAT through both a C79-based claim and postponed VAT accounting.

The Goods Are Used for VAT-Exempt Activities

Input VAT recovery may be restricted or unavailable.

How Can Hellotax Help?

Hellotax can support your UK VAT compliance by helping you:

• Understand the import VAT recovery procedure.
• Identify the documentation needed for VAT reporting.
• Account for import VAT correctly in your UK VAT returns.
• Identify discrepancies in import VAT records.
• Review import VAT reporting questions relating to your business.

Please note: Your business remains responsible for ensuring that customs declarations and import VAT documentation are correct. The availability of specific services depends on your Hellotax service agreement.

Official Sources

• HMRC — Paying VAT on imports
• HMRC — Completing your VAT return using postponed VAT accounting
• HMRC — Getting your import VAT certificate (C79)

This article provides general information about UK import VAT recovery. Individual circumstances, including VAT recovery restrictions and customs arrangements, may affect the procedure.