VAT on imports - confusing problem

[mattcarr41]

hello all

 

I have a problem regarding import VAT for my business.

 

At the start of the year, I purchased goods from a company in Saudi on agreed payment terms of 60 days from shipping date.

 

When I received the relevant documents, I forwarded these onto my customs clearing agent, who then took care of duty, vat etc on my behalf using their deferment HMRC account, and I would then pay back to them the sum paid in VAT once I had received the goods.

 

however, the supplier in Saudi then changed their minds on the payment terms and insisted on a bank guarantee from me (letter of credit or such like) which I was not in a position to offer.

 

therefore, they changed the consignee for the goods to a company based in the UK with whom they already dealt with, and this company took complete ownership.

 

I then completed my vat return for the period, but HMRC are refusing to issue a reclaim on the vat associated with these goods as my business never took ownership, but of course the agent acting on my behalf had paid the duty and vat on my behalf.

 

the other uk company refused to pay the vat, although they paid the duty element direct to my agent as they had now taken the goods themselves.

 

therefore, I have not paid any sums to the supplier or the agent, and the agent are now trying to take me to court for the outstanding amount they paid originally (£11,500)

 

HMRC still refuse my claim, the company who have taken ownership of the goods have agreed with HMRC that they will pay the vat for these goods in their sales (which will show on their VAT return), and my agent is currently £11,500 out of pocket

 

I have tried speaking with all parties involved without success, and now face the prospect of losing in court and having to make the payment of £11,500 plus costs although I haven't ever actually received any goods

 

any advice on this would be appreciated

[ASIIndustries]

Summary:

1: So basically you paid your supplier to send the goods to the UK.

 

2: Your agent pre-paid HMRC Vat & duties, but never received the goods.

 

3: Your supplier sent the goods via their agent in the UK, whom received the goods, & paid a fee to your agent, but have not yet paid the Vat & duties to HMRC.

 

4: You have not paid anyone for the Vat & dutes or rejected the goods.

 

5: You are attempting to to reclaim the Vat & dutes from HMRC that you have not paid as yet.

 

Greetings [mattcarr41] Firstly you have a number of options to resolve this,

 

1a: Your agent returns the fee to your supplier's agent in return for the ownership of goods.

 

1b: You pay your agent the Vat & duties & the fee for the service, when they receive the goods.

 

2a: Your agent requests a refund from HMRC for the failed import & keeps the fee from your supplier's agent & your agent refunds you the fee for the service.

 

2b: You pay your supplier's agent Vat & duties plus a fee for the service which may be more expensive than your own agent's fee.

 

3a: You reject the goods, then you can either request a refund from your supplier or re-delivery via your agent which is more expensive as you are doubling transit costs.

 

3b: Your agent requests a refund from HMRC for the failed import & refunds the fee from your supplier's agent.

 

3c: Your supplier's agent returns the goods to your supplier in Saudi.

 

4: Once you have ownership of the goods, normally only once you sell the goods on you can get a refund from HMRC, occassionally end-users can get the goods zero VAT rated or a refund from HMRC.

Edited October 5, 2013 by ASIIndustries