Revenue and Customs Brief 3 (2022): postponed VAT accounting and businesses registered under the flat rate scheme explains that, from 1 June 2022, businesses registered under the VAT flat rate scheme should no longer include imports accounted for under postponed VAT accounting within their flat rate turnover.
The introduction of postponed VAT accounting on 1 January 2021 allows UK VAT registered businesses to declare and recover import VAT on the same return, rather than having to pay it up front when the goods are imported and recover it later.
HMRC guidance has now been updated to reflect the new treatment for import VAT for flat rate scheme traders using postponed VAT accounting. Businesses must adopt the new guidance for VAT return periods beginning on or after 1 June 2022.
For VAT return periods beginning before 1 June 2022, businesses should continue to include the total value of the imported goods when accounting for import VAT on their VAT return within their flat rate turnover. Businesses should then apply the appropriate flat rate percentage to the total. HMRC will not collect any amounts that may have been due if the correct treatment had been in place for periods starting before 1 June 2022 and businesses will not be penalised in relation to those amounts. In these circumstances businesses do not need to amend previously declared returns.
From 1 June 2022, businesses registered under the flat rate scheme should no longer include imports accounted for under postponed VAT accounting within their flat rate turnover. The full amount of import VAT should be added to box 1 of the VAT return after the flat rate calculation has been completed.
Revenue and Customs Brief 3 (2022): postponed VAT accounting and businesses registered under the flat rate scheme explains that, from 1 June 2022, businesses registered under the VAT flat rate scheme should no longer include imports accounted for under postponed VAT accounting within their flat rate turnover.
The introduction of postponed VAT accounting on 1 January 2021 allows UK VAT registered businesses to declare and recover import VAT on the same return, rather than having to pay it up front when the goods are imported and recover it later.
HMRC guidance has now been updated to reflect the new treatment for import VAT for flat rate scheme traders using postponed VAT accounting. Businesses must adopt the new guidance for VAT return periods beginning on or after 1 June 2022.
For VAT return periods beginning before 1 June 2022, businesses should continue to include the total value of the imported goods when accounting for import VAT on their VAT return within their flat rate turnover. Businesses should then apply the appropriate flat rate percentage to the total. HMRC will not collect any amounts that may have been due if the correct treatment had been in place for periods starting before 1 June 2022 and businesses will not be penalised in relation to those amounts. In these circumstances businesses do not need to amend previously declared returns.
From 1 June 2022, businesses registered under the flat rate scheme should no longer include imports accounted for under postponed VAT accounting within their flat rate turnover. The full amount of import VAT should be added to box 1 of the VAT return after the flat rate calculation has been completed.
