Last updated: 14 October 2026
How do you treat purchases from the USA for UK VAT?
It depends on whether you buy goods or services. For goods imported from the USA, import VAT of 20% (on most goods) is due at the UK border, plus any customs duty. VAT-registered businesses can use postponed VAT accounting to account for it on their VAT return instead of paying it upfront. For services bought from a US business, such as software subscriptions or consultancy, you normally apply the reverse charge on your VAT return.
Importing goods
Consignments over £135
Import VAT is charged on the value of the goods plus shipping, insurance and duty. The courier or your customs agent usually handles the declaration. With postponed VAT accounting (PVA), you:
- declare the import VAT in box 1 of your VAT return
- reclaim it in box 4 of the same return
- download your monthly postponed import VAT statement from HMRC
That avoids paying VAT upfront and waiting for a refund.
Consignments of £135 or less
For most low-value goods sold directly to UK buyers, the seller, or an online marketplace, charges UK VAT at the point of sale. If you give your VAT number, the seller may not charge VAT, and you account for it under the reverse charge.
Customs duty
Duty depends on the commodity code of the goods and where they were made. Goods made in the USA usually pay the standard UK Global Tariff rate. Duty is a cost and can’t be reclaimed as VAT.
Buying services from the USA
For most business-to-business services, the place of supply is the UK. The US supplier doesn’t charge UK VAT, so you apply the reverse charge:
- Declare output VAT on the service value in box 1
2. Reclaim the same amount in box 4, if you can recover input VAT in full
3. Include the net value in boxes 6 and 7
The effect is nil for most businesses, but the value counts towards your VAT turnover if you are not registered.
Example
A UK company imports equipment worth £5,000 from California, with £400 of shipping and 2% duty (£108). Import VAT is 20% of £5,508, which is £1,101.60. With PVA, it is declared and reclaimed on the same VAT return.
Records to keep
- Customs declarations (C88 or the import entry)
- Postponed import VAT statements
- Commercial invoices and shipping documents
- Reverse charge workings for services
Import VAT errors
The most common mistake is reclaiming VAT shown on a courier’s invoice rather than on the C79 certificate or postponed VAT statement. Download your monthly postponed import VAT statement from the Customs Declaration Service and match each entry to your records. Make sure you are the importer of record, because only the importer can reclaim the VAT.
Frequently asked questions
Can I reclaim import VAT the courier charged me?
Yes, with the import VAT certificate (C79) or postponed statement in your name. The courier’s handling fee invoice isn’t enough.
Do I need an EORI number?
Yes, to import goods into the UK.
Do digital downloads count as goods?
No. They are services, so the reverse charge applies.
What about buying from the EU?
The same rules apply as for the USA. See buying goods from the EU.
Related: VAT on services from abroad.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with VAT on imports. See our VAT accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
