Importing Goods & Duty Deferment
From the 01 January 2021, once the transition period ended for the UK leaving the EU, the place of way to obtain freight transport and associated services changed. Previously the zero-rate applied in respect of transport into and from the EU. Now it applies in respect of transport into and out of the UK.
When exploring the VAT treatment of supplies you need to take into account the following:
- The host to way to obtain your services, which follows the status of the customer, and
- The liability of the supply, which follows the place of way to obtain your services
Customer running a business (B2B)
Where supplies of freight transport and related services are to a customer 'in business' then your B2B general rule applies, the place of supply being in which the customer belongs for the purpose of receiving your supply.
However, where the supply of these types of services would have a location of supply in the UK underneath the general rule, but take place wholly away from UK, the supply is treated as happening where performed and is therefore away from scope of UK VAT.
Customer not in business (B2C)
| Journey | Place of supply |
| Transport inside the UK | UK |
| Transport between Northern Ireland and EU | where the journey begins |
| All other journeys | Where transport takes place in proportion towards the distance covered |
| Ancillary transport related services | where physically performed |
Having revealed that the area of supply may be the UK, the availability of freight transport is standard rated apart from:
- Transportation and related services associated with an import to, or export from, the UK
- Any other transport of goods from a place within to a place away from UK and vice versa
- Handling or storage of ship, train or aircraft cargo (in certain circumstances set out in Notice 744B section 7)
These supplies are zero rated.
Duty Deferment
Applying for any Duty Deferment Account will be beneficial if your business has numerous batches of imported goods each month and also the freight carrier advance payment charge is material.
Deferment accounts will help you to pay import duty and VAT liabilities on imports having a single direct debit rather than spending money on numerous consignments separately.
The payment will be due around the 15th of the following month. When the total monthly duty and VAT liability is more than lb10,000 HMRC may ask for a bank guarantee and/or further financial information.
Once the applying qualifies, the deferment account number should be used on all of your customs declarations.
