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.
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