VAT Adjustments - VAT on Imported Goods

When goods are purchased from a country outside the EU then import VAT may be applied. Typically, a separate invoice is supplied from the courier showing the amount of import duty and VAT due.

If you have received form C79 at the point of posting the courier invoice you can claim the Import VAT directly.

If you there’s no corresponding form C79 at the point of posting, you cannot initially claim the Import VAT so the invoice should be posted accordingly using Out of Scope VAT codes where appropriate.

The use of the Out of Scope VAT code prevents the VAT being reclaimed on your VAT Form 100 for Import VAT and Duty.

If you later receive your C79 certificate you can reclaim the Import and Duty VAT using the Cashbook Payment option.

In the Cash A/C box, select the Contra / Adjustments account and enter a zero value in the Total-Amt box.

On line 1 select the relevant expense account, then enter the Import VAT value as zero in the Net-Amt box, the relevant VAT code in the Tax box, and the actual reclaimed VAT amount in the Tax-Amt box.

One line 2 repeat the process for the reclaimed Duty VAT.

One Line 3 Reverse the Out of Scope Purchase Invoice posting by selecting the expense account, entering the Out of Scope VAT code and then setting the VAT amount as the negative equivalent of the Import and Duty VAT.