What to do with Form C79?

Posted on Posted in VAT
It was a Monday morning and surprisingly M25 was not that busy. My commute from Sidcup to Colnbrook was not bad as the door to door journey was around 1 hour 12 minutes. Anyway, I am lucky that I don’t travel this much every day but, I will be travelling to Colnbrook until February as I am helping a new client setting up his accounting system.

Reached client’s office at 8:45, made me a coffee and started looking up the documents. There was a form C79 in my tray with a little post-it attached. “Kandarp, Not sure what this is.” Obviously, the client was coming across Form C79 for the first time in his life. If a business is involved in importing from outside EU country, this form is a very important form that should be kept safe.

In this post, I will explain what to do when you receive a Form C79.

First of all, keep the form safe. The amount mentioned in Form C79 can be claimed as input VAT on your VAT return. (Box 4)

If you use a shipping agent/freight forwarder, you will receive an invoice from them to pay them the import Duty / VAT on import that they have paid to HMRC on your behalf.

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For example, an invoice from DHL shows £10 Admin Fee, £0 as Duty and, £39.86 as VAT payable.

Here, you will find that Form C79 will include an entry for £39.86 with the reference of same Air Way Bill number show on DHL Invoice.

The accounting Entry for this transaction will be as under

Debit – Handling Charge (or any other similar account in your books) – £10
Debit – VAT on Import – £39.86 (This is effectively Box 4 Entry for VAT return)
Credit – DHL – £49.86

 
If you want to find out as to how to process this on Xero, please see the next post.