How to Deal with Postponed VAT Accounting

Following the completion of the Brexit deal on 31st December 2020, the treatment of imports from the EU into the UK has undergone changes.

Imports to Northern Ireland remain unaffected, and the existing Reverse Charge Mechanism continues to apply.

A new process known as Postponed VAT Accounting is now available for those who opt in.

With Postponed VAT Accounting

For all imports into the EU and those from outside the EU into Northern Ireland, you will not be charged VAT at the point of importation. Instead, each month, you will download a VAT certificate called a C79 from HMRC, which details the amount of VAT on the imports.

This document must be processed monthly in Navigator to ensure accurate posting in your VAT return.

Without Postponed VAT Accounting

If you do not have Postponed VAT Accounting in place, you will not be charged VAT by the supplier upon import. However, you will receive a VAT invoice from your importer for the VAT amount, which can be posted as a regular purchase invoice (similar to all VAT transactions).

Processing the Monthly C79 Journal

To process the monthly C79 Journal, simply create a nominal journal as follows (using an example VAT due on the C79 of £2,000):

• Credit £2,000.00 to 0.0.70.3 – Confirm entry for the VAT return, entering 0 as the turnover figure.
• Debit £2,000.00 to 0.0.60.4 – Confirm entry for the VAT return, entering 0 as the turnover figure.