Postponed VAT Accounting

Following the completion of the Brexit deal on the 31st Dec 2020, the treatment of Imports from the EU into the UK has changed.

Imports to Northern Ireland have remained unchanged and the existing Reverse Charge Mechanism continues to apply.

A new process called Postponed VAT accounting is now taking place for those that apply for it.  

With Postponed VAT Accounting in Place (all imports into the EU and those from outside the EU into Northern Ireland)

You will not be charged VAT on the importing of any goods from the EU (and outside) .  Instead, each month, you will download a VAT certificated called a C79 from HMRC which shows the amount of VAT on the import.

This document needs to be processed monthly into Navigator to post into the VAT return.

Without Postponed VAT Accounting in Place

You will not be charged VAT from the supplier on import, however you will receive a VAT invoice from your importer for the VAT which can be posted as a normal purchase invoice (as all VAT).

The way Postponed VAT is accounted for on the VAT return is explained here  

Processing the monthly C79 Journal.

To process the monthly C79 Journal you simply do a nominal journal as below - the example being the VAT due on the C79 being £2,000

 CR £2,000.00 to 0.0.70.3 - confirm to enter on to the VAT return but enter 0 as the turnover figure

 DB £2,000.00 to 0.0.60.4 - confirm to enter on to the VAT return but enter 0 as the turnover figure

The process is demonstrated in the video below