Deduction of Import VAT by non-owners of the goods

HMRC Customs Brief 2 (11 April 2019) says that HMRC are aware of incorrect treatment by businesses whereby import VAT has been incorrectly deducted as input tax by non-owners of the goods.

The brief calls out two specific situations: Toll operators and resellers. However, the updated guidance appears potentially to catch in addition other “non-owners” including lessees, importers of goods for repair (e.g. where Inward Processing cannot be used), and importers of high value goods such as art for sale (e.g. at auction) in the UK.

From 15 July 2019, HMRC will only allow claims for input tax deduction made using the correct procedures.

 

Comment

Only the owner of the good concerned is entitled to recover the import VAT. There has been considerable confusion in this area and this change in guidance potentially creates VAT recovery problems. 4 Eyes Ltd is the UK and Republic of Ireland member of a major European VAT network. We will be able to assist you with assessing the correct basis for import VAT recovery.