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A UK company purchases goods from its US parent company, but a recent HMRC VAT visit indicated that it may be entitled to claim import VAT
A UK company (A) is a subsidiary of US parent company (B) from which it buys goods. A recently had a VAT visit when HMRC indicated that it may not have claimed import VAT within its input tax claims.
A’s management said they had been receiving C79 certificates which had simply been filed. B has paid the shipping and import costs.
It therefore sounds correct that A has not claimed for import VAT because it did not suffer this – it was the cost of B. We suspect that A has been receiving C79 certificates because Fedex provided A’s VAT registration number to HMRC even though they billed B.
B invoices A once a month to cover stock for that month. The purchase cost is calculated so that the cost in A’s accounts amounts to 70% of sales.
If these invoices included shipping costs A would in effect...
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