VAT and Imports – The Importance of the C79

Trading Outside the EU

Businesses that import from outside the EU usually appoint an import agent to assist with the process. Whilst the agent should provide you with all the documentation needed to support the purchase costs, they are not responsible for paying the VAT as the goods arrive in the UK.

When The Shipper Pays!

In the absence of your business having arranged a duty deferment account with HMRC, the agent might pay the import VAT and Duties on behalf of the business, and then seek reimbursement from the business. The document from the shipper which notes the VAT and Duty due is NOT a VAT invoice and cannot be used to support the input VAT claim by your business.

Forms C79

Forms C79 are issued by HMRC. They confirm the input VAT amounts and link them to the name of your business. HMRC will issue the C79 by reference to the EORI number which you should have provided to your shipping agent. This is the only document which can support VAT paid as input VAT and should be retained with the relevant purchase invoices.

Economic Operator Registration and Identification (EORI) Number

Delays will arise where the business has not accurately quoted their EORI number to their agent. This will prevent a C79 being issued correctly which may in turn, delay recovery of that input VAT. Where businesses rely on the agents invoice figures on which to recover VAT, they can mistakenly include duty amounts as input VAT on their VAT returns. This will lead to compliance errors, as duty can never be recovered on a VAT return, and the input VAT can only be claimed when supported by a C79. Where C79 forms have been lost, it is possible to obtain duplicates, but this also delays recovery of the VAT paid from HMRC.

If you have any questions or if you would like to discuss any of the issues raised in more detail, please contact Hannah Farmborough or call on 0207 429 4147 to be put in contact with a member of our VAT team

This article originally appeared on the blog of our member firm, MHA Moore & Smalley.