Solution Properties
Solution ID:
251020102937057
Last Modified Date:
Mon Oct 20 10:57:26 UTC 2025
Taxonomy Path:
Case category//How do I...//governmental/legislative compliance
Author:
[email protected]
Post import VAT and duty without Postponed VAT Accounting
Description

 NOTE: This article supports VAT Notice 702 Imports and explains how to claim the import VAT on goods only. If you've received services or aren't sure whether you can reclaim import VAT, contact your local VAT office.

When you purchase goods from a country outside the UK, the purchase can include import VAT. You’ll receive a separate invoice showing the import VAT and duty paid at customs on your behalf. If your company is registered for VAT, you can usually reclaim the import VAT with supporting C79 certificates from HMRC.

Since 1 January 2021, the UK now uses Postponed VAT Accounting. You report import VAT on your VAT Return instead of paying it at the border. If you use this method, the import VAT won’t appear on the import agent’s invoice—it’s on a monthly HMRC statement instead.

If you use Postponed Accounting, follow our alternative article to Post import VAT and duty on goods using Postponed Accounting.

NOTE: If you're based in Northern Ireland, this will only apply to goods imported from outside the EU.

Cause
Resolution

Create a supplier record for the import agent

You need to create a new supplier record to record the invoice for the import duty and VAT.

  1. Click Suppliers then click New.
  2. Complete the supplier record as follows:
    A/C* Enter the account reference for the import agent account, for example, IMPORTS.
    Name Enter the account name, for example, Import Company.

    Complete any other information as required.

  3. Click Save then click Close.

 

Post an invoice for the purchase of goods

This section provides a guide to recording the supplier invoice.

In Sage 50 Accounts v27.2 and above a new tax code, T14, exists to post import of goods with no VAT.


To record this, post a purchase invoices as follows:

  1. Click Suppliers then click Batch invoice.
  2. To record the supplier invoice, enter the details in the boxes provided, for example:

    If you use Foreign Trader, create the supplier's account in Dollars and enter the invoice in Dollars. For example, enter an exchange rate of 1.1 then enter the following:
    A/C* Date* N/C* Details Net T/C* VAT
    Supplier Date Nominal code Details 1,100.00 T14 0.00

    If you aren't using the Foreign Trader option, enter the supplier invoice as its equivalent Sterling value. For example:

    A/C* Date* N/C* Details Net T/C* VAT
    Supplier Date Nominal code Details 1,000.00 T14 0.00
    The example represents zero-rated items. If you're unsure about the VAT rating for your invoice, contact your local VAT office.

  3. Click Save then click Close.

You've now posted the invoice received from your supplier for the goods purchased. The net amount of this purchase invoice shows in box 7 on the VAT Return. Now post a supplier invoice for the duty and import VAT due to HMRC.

Post an invoice for the duty and import VAT

Post the courier's invoice to their supplier account. If you haven't yet posted the original supplier invoice, follow the Post an invoice for the purchase of goods section above.

You can't reclaim any import VAT paid until you have received form C79 from HMRC.

If you've received form C79

  1. Click Suppliers then click Batch invoice.
  2. To record the supplier invoice for duty and import VAT, enter the relevant details in the boxes provided. For example:
    A/C*
    Date*
    N/C*
    Details
    Net
    T/C*
    VAT
    IMPORTS Date 5101 Import VAT 0.00 T19 200.00
    IMPORTS Date 5101 Import duty 100.00 T19 20.00
    NOTE: If you prefer, you can use T1 here instead. Both T1 and T19 appear on the VAT Return in boxes 4 (VAT) and 7 (NET). By default, T19 is the non postponed VAT code, but can differ depending on your existing tax codes. 

    If you're using the Sage default nominal structure, 5101 is the Import Duty nominal code. The import VAT transaction doesn't affect this nominal code, as the net value is zero.
    Import duty usually has the same VAT rate as the item. If unsure, contact your local VAT office.

  3. Click Save then click Close.

You've now posted your duty and import VAT charges. The VAT element shows in box 4 in the VAT Return, reclaiming the VAT amount.

You've now completed all the transactions. You've reclaimed the import VAT and the VAT on duty on the goods purchased from outside the UK.

If you've not received form C79

  1. Click Suppliers then click Batch invoice.
  2. To record the supplier invoice for duty and import VAT, enter the relevant details in the boxes provided. For example:
    A/C*
    Date*
    N/C*
    Details
    Net
    T/C*
    VAT
    IMPORTS Date 5101 Import VAT 0.00 T9 200.00
    IMPORTS Date 5101 Import duty 100.00 T0 0.00
    IMPORTS Date 5101 Import duty 0.00 T9 20.00
    If you're using the Sage default nominal structure, 5101 is the Import Duty nominal code. The import VAT transaction doesn't affect this nominal code, as the net value is zero.

    Import duty usually has the same VAT rate as the item. If unsure, contact your local VAT office.

  3. Click Save then click Close.

You've now posted your duty and import VAT charges. The VAT Return doesn't include the VAT element because you can't reclaim the VAT until you have received form C79. Using a T9 tax code prevents the VAT from appearing on your VAT Return. Once you receive form C79, to reclaim the VAT, post a journal as follows:

  1. Click Nominal codes then click Journal entry.
  2. To reclaim the VAT, enter the relevant details in the boxes provided. The T19 tax code ensures the VAT shows on your VAT Return. This appears in boxes 4 (VAT) and 7 (NET):
    N/C*
    Details
    T/C*
    Debit
    Credit
    2201 Import VAT adjustment T19 200.00 0.00
    2201 Import VAT adjustment T19 20.00 0.00
    2201 Import VAT adjustment T9 0.00 220.00
    NOTE: If you prefer, you can use T1 here instead of T19. Both T1 and T19 appear on the VAT Return in boxes 4 (VAT) and 7 (NET). By default, T19 is the non postponed VAT code, but can differ depending on your existing tax codes. 

  3. Click Save then click Close.

You've posted all transactions to reclaim import VAT and VAT on duty for goods from outside the UK.

[BCB:19:UK - Sales message :ECB]
[BCB:97:Limitless - 50 Accounts - VAT:ECB]
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