- Postponed VAT accounting allows businesses to avoid paying VAT upfront when importing goods into the UK or Northern Ireland.
- It helps improve cash flow by declaring and recovering VAT from imports on the same VAT return.
- Any company registered for VAT in the UK can use postponed VAT accounting.
- Benefits include reducing the financial impact of VAT payments on imports, easier management of import VAT, flexibility in choosing which items to pay VAT on, and no need to pay fees to freight handling companies.
- The process involves notifying companies and freight forwarders, including necessary registration numbers on customs declaration forms, gathering required paperwork, registering for the Customs Declaration Service, and submitting the VAT return online.
- Challenges include keeping meticulous records, highlighting mixed payments, and accurately calculating VAT payments.
- Postponed VAT accounting is not applicable for imports below £135.
- It benefits small businesses by reducing the burden of VAT on cash flow and simplifying the import process.
- Customs duty is not included in postponed VAT accounting.
- Blue dot offers a VAT recovery platform that combines AI technology and tax expertise to streamline VAT processes and maximize VAT recovery potential.
Source: bluedotcorp.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
