Recovering Import VAT in the UK: Who Is Entitled?

HMRC’s 2019 Clarification on Ownership and the Importer of Record

Importing goods into the UK brings with it a key VAT question: who is allowed to reclaim the import VAT?

HMRC addressed this directly in 2019, clarifying that the right to recover import VAT belongs to the owner of the goods at the time of import, provided that the owner is correctly shown as the importer of record on the customs declaration.

This clarification matters for UK and overseas businesses alike, especially where multiple parties are involved in the supply chain.

The Core Principle: Import VAT Can Only Be Reclaimed by the Owner of the Goods

HMRC’s position is now unambiguous. The business that owns the goods at the point of import and is named as the importer of record is the only party entitled to reclaim the import VAT.

This means two things must be true:

1. You must own the goods when they enter the UK.
2. You must appear as the importer of record on the customs declaration (C79 certificate or CDS import statement).

Paying the VAT, arranging the shipment, or acting as a facilitator does not create a right to recover the VAT if you do not own the goods.

Why HMRC’s Clarification Was Necessary

Before 2019, supply chains often produced situations where:

• A business paid import VAT but did not own the goods.
• Freight forwarders were mistakenly listed as importer of record.
• Overseas sellers misunderstood their ability to reclaim import VAT.
• UK group companies imported goods for related entities without owning them.

HMRC confirmed that VAT recovery follows ownership, not simply the flow of funds or logistics responsibilities.

Typical Situations Affected

Overseas Sellers Using DDP Terms

If an overseas supplier imports goods into the UK under DDP (Delivered Duty Paid) terms:

• The overseas seller owns the goods at import, so they must be the importer of record.
• The UK customer does not own the goods at import, so they cannot reclaim the import VAT.

Even if the UK buyer ultimately pays for the goods, they cannot reclaim VAT on a transaction they did not own at the time of import.

Group Companies

Where a UK company imports goods owned by an overseas parent:

• If the parent owns the goods at import, the parent must be the importer of record to reclaim VAT.
• If the UK company does not own the goods, it cannot reclaim import VAT regardless of who paid the freight or VAT.

Ownership at the point of import is decisive.

Fulfilment Centres and Third-Party Logistics Providers (3PLs)

A warehouse or logistics provider may mistakenly appear as the importer on customs documents.

However, because they do not own the goods, they:

• Cannot reclaim import VAT, and
• May prevent the actual owner from reclaiming it unless the declaration is corrected.

Correct EORI usage and clear commercial invoices are essential.

What Businesses Should Do

• Ensure the importer of record is the owner
  • The customs declaration must match the commercial reality.
• Confirm ownership at the point goods enter the UK
  • Purchase contracts, Incoterms and invoicing should clearly reflect ownership.
• Keep supporting evidence
  • C79 certificates or CDS import VAT statements must show the correct owner/importer.

• Review supply-chain structures
  • Particularly where goods pass through multiple parties or jurisdictions.

Conclusion

HMRC’s 2019 clarification places ownership at the centre of import VAT recovery.

The business that owns the goods at the time of import and is listed as the importer of record is the only entity entitled to reclaim the VAT.

For UK and overseas businesses alike, ensuring that customs declarations, commercial documentation and Incoterms align with ownership is essential to avoid denied VAT claims and unexpected costs.