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VAT Return for import VAT, Duty and Freight

Question asked by Katalin Kovacs 6 months ago

Good Afternoon

Can someone clarify please how to account in clearbooks for import vat, Duty and Freight?

We import goods from non-EU. A bill was received from our UK shipping agent which shows ie:

Import vat £4000 20% vat Nil Duty £1000 20% vat Nil Freight £800 20% vat Nil HMRC processing fee £100 20% vat nil They saying all the above are not subject for domestic 20% vat

Based on HMRC guideline The import vat is treated same as input tax and can be claimed in Box 4 on the vat return in that tax month when the entry was made.

What Is the best way to do this? Create a Bill in clearbooks with the supplier > Vat treatment : Goods or Services from UK supplier> then add a Nil value item with a Manual VAT entry £4000, so the vat amount will show on balance sheet’s vat control account and also on vat return, box 4 ?

How can we treat the Duty, freight and the hmrc processing fees? Are these need to exclude from the VAT return? Are these VAT exempt items or out of scope or 0% rated?

There is a 20% vat paid on the Duty but the amount is included in the Import VAT (so it’s not a domestic vat)

Regarding the freight I have read “Freight transport and associated services (VAT Notice 744B)” but it’s not really clear for me what should be the place of supply and is the Freight out of scope or 0% rated or exempt?

Thank you

2 Replies

You have worked it out yourself - you are correct on how to treat the VAT

In CB create your Purchase Invoice for your Shipping Agent/Importer( Goods and Services from a UK Supplier) and add the Import cost items (excluding the VAT Charge) as the cost base of the invoice (all at 0%). Then set the VAT rate on one of the items to Manual and add the import VAT to the VAT box. CB will then allocate to VAT Control and the appropriate boxes in the VAT Return

You could aggregate the cost items into one line if you don't need the detail to be recorded in CB - but if you attach the Supplier Invoice to the Purchase Bill in CB, then you can always pick the detail up without looking for the paper record.

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