HMRC has published Revenue and Customs Brief 2 (2019): VAT – import VAT deducted as input tax by non-owners. This explains correct treatment for the deduction of import VAT paid by a taxable person who is not the owner of the relevant goods. Earlier guidance was unclear.

Brief 2 (2019) is for:

  • a non-owner who has reclaimed import VAT on goods imported into the UK
  • a ‘ toll operator’
  • advisers or agents dealing with businesses importing goods to the UK

HMRC is concerned that the non-owners are reclaiming VAT instead of actual owners. Typically this occurs if someone acts as a distributor in the UK of imported goods, or brokers a sale between an overseas seller and UK buyer and acts as middleman in the transaction. 

The correct procedure is that the overseas owner of the goods is the importer of record, alternatively if goods are instantly resold, the new owner is the importer of record. Only the owner may reclaim the import VAT.

HMRC is aware of incorrect treatment by businesses whereby import VAT has been incorrectly deducted as input tax by non-owners of the goods.
It accepts that as previous guidance was not clear on the correct procedure, businesses in these situations have been acting in good faith.

See Revenue and Customs Brief 2 (2019): VAT – import VAT deducted as input tax by non-owners 

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