This is the system, formerly existing in the UK but withdrawn in the mid-1980s, which allows VAT-registered businesses importing goods from outside the UK to account for import VAT through their VAT returns rather than to the customs authorities at the point of import. Postponed accounting applies to imports by VAT-registered importers from both EU member states and non-EU jurisdictions, making the major beneficiaries of this change those who have historically imported goods into the UK from outside the EU, for whom a cash flow saving arises.
The postponed VAT due and potentially claimable will be calculated by HMRC based on the import declarations. Businesses are required to access online reports via their Government Gateway account (see www.gov.uk/guidance/get-access-to-the-customs-declaration-service) in order accurately to complete their VAT returns in this regard. There is no need to make any formal application to use postponed accounting, but import formalities at the port must be completed correctly to ensure that the imports are properly processed for these purposes (see https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return). It remains possible to pay the import VAT on importation and claim it later on the VAT return.
Even though it is not output tax, the postponed import VAT should be declared in box 1 of the VAT return. This VAT can also be claimed back as input tax in box 4 of the return on the same basis as any VAT incurred by the business on domestic purchases. It is now clear that boxes 2, 8 and 9 of the VAT return will be required for certain businesses in Northern Ireland, so, unless the format of the return is later changed to include an additional box for postponed import VAT (as was the case when it existed in the UK before), box 1 must now be seen as the place to include both output tax and postponed import VAT.
Although postponed import VAT might resemble a form of reverse charge, and is likely sometimes to be referred to as such, strictly this is not a correct designation.