By
August 11, 2026
Does a UK Company Pay VAT on Imported Goods?
Yes, import VAT can be due when a UK company imports goods into the UK, but whether the company ultimately bears the cost depends on its VAT registration status, how the goods are imported and whether the import VAT is recoverable.
For a VAT-registered UK company importing goods for taxable business activities, import VAT can often be reclaimed, subject to the normal VAT recovery rules.
Businesses may also be able to use Postponed VAT Accounting (PVA), allowing them to account for import VAT through their VAT Return rather than paying it upfront at the border.
However, import VAT is different from customs duty.
A business may potentially face:
Import VAT
Customs duty
Other customs or clearance charges
when bringing goods into the UK.
This guide explains how import VAT works for UK limited companies.
Import VAT is VAT charged when goods are imported into the UK.
It is broadly designed to ensure that imported goods receive comparable VAT treatment to goods purchased domestically.
For example:
UK company buys goods overseas
↓
Goods enter the UK
↓
Import declaration is made
↓
Import VAT may become due
The way that VAT is paid or accounted for depends on the import arrangements.
Import VAT can potentially apply whether or not the company is VAT registered.
However, VAT registration makes an important difference.
A VAT-registered company may generally be able to recover qualifying import VAT where the goods are imported for taxable business purposes and the relevant conditions are satisfied.
A company that is not VAT registered generally cannot reclaim import VAT through a VAT Return.
Import VAT can therefore become an actual business cost.
Imagine a UK company imports £10,000 worth of goods.
For illustration, assume the VAT value of the import is £10,000 and the applicable VAT rate is 20%.
The import VAT would be:
£10,000 × 20% = £2,000
The business may therefore need to account for:
Import value: £10,000
Import VAT: £2,000
However, actual import VAT calculations can be based on a customs VAT value that includes more than simply the supplier's invoice price.
Import VAT is not necessarily calculated solely on what you paid the overseas supplier.
The VAT value can take account of elements such as:
The exact calculation depends on the import.
Therefore:
Supplier invoice × VAT rate
will not always equal the actual import VAT due.
No.
This is one of the most important distinctions for importers.
VAT charged in connection with importing goods.
A separate customs charge that may apply depending on factors such as:
A shipment can therefore potentially involve both:
Customs duty
and
import VAT.
Potentially, yes.
If the company is VAT registered and imports goods for use in making taxable business supplies, it may generally be able to recover the qualifying import VAT.
Normal VAT recovery rules apply.
For example:
Import VAT accounted for: £4,000
If the entire amount qualifies for recovery:
Recoverable input VAT: £4,000
The net VAT cost may therefore ultimately be £0.
This is one reason VAT registration can be important for businesses importing substantial quantities of goods.
Postponed VAT Accounting, commonly called PVA, allows VAT-registered businesses to account for import VAT through their VAT Return.
Instead of:
Import goods
↓
Pay import VAT upfront
↓
Wait to recover it later
the company can potentially:
Import goods
↓
Account for import VAT on VAT Return
↓
Recover qualifying import VAT on the same VAT Return
This can provide a significant cash-flow advantage.
Imagine a VAT-registered company imports goods and £5,000 of import VAT is due.
Using PVA, the company may account for:
Import VAT due: £5,000
and, assuming full recovery is permitted:
Input VAT recoverable: £5,000
on the relevant VAT Return.
The two amounts can effectively offset each other.
The company therefore avoids physically paying £5,000 of import VAT at the border and waiting to reclaim it later.
No.
PVA does not eliminate import VAT.
It changes how the VAT is accounted for.
The business still needs to record the import VAT correctly.
Think of it as:
Import VAT exists
but
payment and recovery are handled through the VAT Return
rather than necessarily paying the VAT upfront.
VAT-registered businesses importing goods into the UK can generally use PVA where the relevant conditions are satisfied.
The business needs to ensure that its customs declarations and VAT records are handled correctly.
Businesses using customs agents should make sure the agent knows whether PVA is being used.
Businesses using PVA can access postponed import VAT statements.
These statements show the import VAT that needs to be accounted for through the VAT Return.
They are important accounting records.
Companies should download and retain their statements as part of their VAT records.
Do not rely solely on the supplier invoice when accounting for import VAT.
Under the current PVA system, the relevant import VAT is generally reflected in different boxes of the VAT Return.
For example, import VAT accounted for under PVA can affect:
Box 1 — VAT due
and, where recoverable:
Box 4 — VAT reclaimed
The value of relevant imports is also reflected in the appropriate VAT Return reporting.
Businesses should use their postponed import VAT statements and accounting records when completing the Return.
A company does not always have to use PVA.
Import VAT may instead be paid when the goods are imported.
Where a VAT-registered business later wants to recover import VAT paid in this way, it generally needs appropriate evidence.
Historically, this is commonly associated with the C79 import VAT certificate.
A C79 is evidence of import VAT paid to HMRC under the traditional import VAT payment method.
VAT-registered businesses can use the appropriate C79 evidence when claiming eligible import VAT through their VAT Return.
Businesses should retain C79 certificates with their VAT records.
If you use PVA, your postponed import VAT statement serves a different purpose.
Not usually on the basis of the overseas supplier's invoice alone.
Import VAT is not the same as UK VAT charged by a domestic VAT-registered supplier.
The company generally needs the appropriate import VAT evidence, such as:
Postponed import VAT statement
or
C79 evidence
depending on how the import VAT was accounted for.
Good customs documentation is therefore essential.
Businesses importing goods into Great Britain will generally need a GB EORI number for customs purposes.
An EORI number helps identify the business in customs declarations.
Depending on the transaction, different arrangements can apply to Northern Ireland.
An EORI number is not the same as a VAT number.
EORI stands for:
Economic Operators Registration and Identification
It is used by customs authorities to identify businesses involved in importing and exporting goods.
A typical Great Britain EORI number begins with:
GB
followed by identifying digits.
A business importing commercially should make sure the correct EORI details are used on its customs declarations.
Many businesses use:
to handle customs declarations.
This does not mean the company can ignore the import VAT treatment.
You should confirm:
Who is the importer of record?
Whose EORI number is being used?
Whose VAT number is on the declaration?
Is PVA being used?
Who receives the import VAT documentation?
Errors in these details can cause problems when reclaiming VAT.
To recover import VAT, the business generally needs to be the person entitled to make the claim and have the required evidence.
If a supplier, courier or unrelated party is recorded as importer instead of your company, recovering the VAT can become problematic.
Businesses should therefore agree the import structure before goods are shipped.
Potentially, yes.
For example:
Chinese supplier
↓
Ships goods to UK company
↓
Goods enter Great Britain
↓
Import VAT may arise
The company may also need to consider customs duty depending on the goods, their origin and applicable tariff treatment.
A VAT-registered company may potentially use PVA and recover qualifying import VAT.
The same general principle applies.
Goods entering the UK from the United States can potentially be subject to import VAT.
Customs duty may also apply depending on the product, customs classification, origin and applicable rules.
The fact that the supplier is American does not remove UK import VAT.
Potentially, yes.
Following Brexit, goods entering Great Britain from EU countries are generally treated as imports for customs and VAT purposes.
For example:
French supplier
↓
Goods shipped to England
↓
UK import
↓
Import VAT may apply
This is different from the pre-Brexit VAT system for intra-EU acquisitions.
Special rules continue to apply to certain movements involving Northern Ireland.
Northern Ireland has special VAT arrangements for certain goods transactions involving EU member states.
Therefore, businesses moving goods between:
Northern Ireland ↔ EU
may need to follow rules different from those applying to:
Great Britain ↔ EU
Businesses operating through Northern Ireland should check the specific HMRC guidance.
Special VAT rules can apply to consignments of goods sold to UK consumers where the consignment does not exceed the relevant value threshold.
In certain circumstances, VAT can be collected at the point of sale rather than through the normal import VAT process.
Marketplace rules can also affect who is responsible for collecting VAT.
This is particularly relevant to overseas ecommerce sellers.
The VAT treatment depends on:
Do not assume every purchase from an overseas marketplace creates reclaimable import VAT.
Check the invoice and customs documentation.
Dropshipping can produce a very different VAT position.
Suppose:
UK company sells to US customer
↓
Chinese supplier ships directly to USA
The goods never enter the UK.
There is therefore no UK import simply because the seller happens to be a UK company.
Compare this with:
Chinese supplier
↓
Ships goods to UK warehouse
↓
UK company receives goods
That is a UK import and import VAT may apply.
Always follow the physical movement of the goods.
Yes, importing inventory for resale can create import VAT.
For example, a UK ecommerce company imports:
£50,000 of stock
from an overseas manufacturer.
Import VAT may arise when the goods enter the UK.
If the company is VAT registered and the stock is used for taxable business activities, qualifying import VAT may potentially be recovered.
Import VAT can also apply to business assets such as:
Whether the VAT can be recovered depends on the normal VAT rules and how the asset is used.
Special restrictions can apply to certain items, particularly cars.
Generally, no.
This is another major difference.
Qualifying import VAT may potentially be recovered by a VAT-registered business.
Customs duty is generally a cost to the business.
For example:
Customs duty: £2,000
Import VAT: £4,400
The company might potentially recover the £4,400 VAT if eligible.
The £2,000 customs duty would normally remain part of the cost of importing the goods.
The commodity code determines how goods are classified for customs purposes.
It can affect:
Incorrect commodity codes can result in incorrect duty payments and customs problems.
Businesses should classify goods carefully.
Yes.
Country of origin can affect the customs duty treatment.
Origin is not necessarily the same as:
Country you bought the goods from
or
Country they were shipped from.
For example, a product shipped from Germany could have been manufactured in China.
Rules of origin can determine whether preferential tariff treatment is available under a trade agreement.
Even if no customs duty is payable, import VAT can still potentially apply.
For example:
Customs duty: 0%
does not mean:
Import VAT: 0%
They are separate taxes.
This is an important point for businesses importing goods under free-trade arrangements.
Shipping and related costs can affect the value used to calculate import VAT.
Depending on the transaction, the VAT value can incorporate:
The import VAT amount can therefore be higher than expected if you calculate it using only the supplier's invoice.
Suppose a UK company imports goods with a customs value of £20,000.
For illustration only, assume:
Customs value: £20,000
Customs duty: £1,000
Relevant VAT value: £21,000
If the applicable VAT rate were 20%:
Import VAT: £4,200
Total potential border taxes:
Customs duty: £1,000
Import VAT: £4,200
The VAT-registered company may potentially recover the £4,200 import VAT if eligible.
The £1,000 customs duty generally remains a business cost.
Actual customs calculations can include additional amounts and should be checked using the applicable rules.
If your company is not VAT registered, it generally cannot reclaim import VAT through a VAT Return.
For example:
Goods: £10,000
Import VAT: £2,000
If the company cannot recover the VAT, that £2,000 becomes part of the effective cost of acquiring the goods.
This should be considered when setting prices and margins.
Potentially.
A business below the compulsory registration threshold may decide to register voluntarily.
For an importing business, one potential advantage is the ability to recover qualifying import VAT.
However, VAT registration also means the company may need to:
The commercial benefit depends on the company's customers, costs and business model.
No.
VAT recovery generally requires the expenditure to relate to the company's business activities and satisfy the normal input-tax rules.
Personal goods imported using the company should not simply be treated as recoverable business expenses.
Mixed business and private use may require an adjustment.
For imports, consider retaining:
These documents help support both accounting and VAT recovery.
UK companies should avoid:
Before importing goods, ask:
Is my company VAT registered?
Does it have the correct EORI number?
Who will be the importer?
What is the commodity code?
What is the country of origin?
Will customs duty apply?
What will the VAT value be?
Will we use Postponed VAT Accounting?
Will the import VAT be recoverable?
Do we have the correct customs evidence?
Planning these points before shipment can prevent expensive problems.
Import VAT can be due when goods enter the UK. A VAT-registered company may often recover qualifying import VAT or account for it using Postponed VAT Accounting.
Potentially, yes, if it is VAT registered, entitled to recover the VAT and has the required evidence.
PVA allows VAT-registered businesses to account for import VAT through their VAT Return rather than necessarily paying it upfront when goods enter the UK.
No. Import VAT and customs duty are separate charges.
Unlike qualifying import VAT, customs duty is generally not recoverable as VAT and normally becomes a business cost.
Potentially, yes, when the goods are imported into the UK.
Potentially, yes. Goods entering the UK from the United States can be subject to UK import VAT.
Goods entering Great Britain from EU countries are generally imports and can be subject to import VAT. Different arrangements can apply to Northern Ireland.
Businesses importing goods into Great Britain will generally need an appropriate GB EORI number.
Depending on how the VAT is accounted for, relevant evidence can include a postponed import VAT statement or C79 documentation.
So, does a UK company pay VAT on imported goods?
Import VAT can be due when goods enter the UK.
But for a VAT-registered company, import VAT may not necessarily represent a permanent business cost.
The process may look like:
Overseas supplier
↓
Goods imported into UK
↓
Import VAT arises
↓
Company uses PVA or pays import VAT
↓
Eligible VAT-registered company claims qualifying VAT
The key distinction is:
Import VAT → potentially recoverable
while:
Customs duty → generally a business cost
For VAT-registered importers, Postponed VAT Accounting can also provide an important cash-flow advantage by allowing import VAT to be accounted for through the VAT Return.
Companies importing regularly should pay particular attention to:
EORI number + importer status + commodity code + origin + customs duty + import VAT + PVA + supporting evidence
Getting these elements right can prevent unnecessary tax costs, delayed shipments and problems reclaiming VAT.
This article provides general information only and does not constitute tax, customs, accounting, financial or legal advice. VAT, customs and trade rules can change and depend on the specific goods and transaction. Check current HMRC guidance or obtain professional advice where necessary.
