importing oil - The Book-keepers Forum (UK)

lor · Guru

importing oil

attilabenko · Guru

Hi,

I think the best is to phone up HMRC VAT helpline - cutoms and duty option. There are a few tricky bits around oil import. They are the most helpful of all I dealt with at HMRC and talking to them did improve my Scottish knowledge as well... :)

semsley · Guru

Where's it being imported from ?

lor · Guru

thank you for your answers. I will tell my client to ring hmrc and explain his situation.

semsley · Guru

Lorraine

if you tell me where he will be importing from I may be able to help.

lor · Guru

sorry semsley, I will find out & get back to you.

lor · Guru

I have been informed Malaysia.

semsley · Guru

Usually with imports outside of the EU you can reclaim VAT but you need a C79 certificate. This is usually provided by the freight forwarder. Import duty is not an expense.

-- Edited by semsley on Friday 2nd of July 2010 02:52:13 PM

attilabenko · Guru

What sort of oil is it? There is some sort of reverse charges on fuel. I believe you have to act as you are the seller and the buyer as well (output and input taxes) ?

lor · Guru

cooking oil, my client filters cooking oil for a living, he is also self employed.

-- Edited by lor on Friday 2nd of July 2010 03:48:26 PM

attilabenko · Guru

is cooking oil not zero rated?

lor · Guru

I know it is zero rated in the uk for sure, but my client has said that there is vat this time as it is being purchased from Malaysia, wondering now if this is correct or not, then I should be able to see from his receipts. I will be seeing them at the end of the forthcoming week.

-- Edited by lor on Saturday 3rd of July 2010 09:47:26 AM

attilabenko · Guru

Hi Lorraine,

As Sheila said before if you paid VAT it will be on the C79 and you will be able to claim it back. I thought whatever the products VAT would be in the UK that's what they would charge you as import VAT but I am not sure if they do zero rated VAT on imports. And there is the thing of importing some sort of vegetable oil for further processing in the UK can make a difference as there is about hundred different categories for veg. oil depending on what veg.,purified/filtered or not, chemical treatment or not,etc. but yes if you paid VAT you can claim it back (include in VAT returns) and duty you cannot.

lor · Guru

Okay, thank you for your answer, if my client has paid vat then I will put this on the vat return to be claimed back, but the import tax I will leave out of the accounts as I understand that you are saying that it is NOT an claimable business expense, is this correct? and he will need C79 for the vat to be claimed back.

-- Edited by lor on Monday 5th of July 2010 12:01:36 PM

-- Edited by lor on Monday 5th of July 2010 12:02:19 PM

semsley · Guru

That's correct Lor. You cannot claim the VAT back without the C79 and import duty is not a business expense.

lor · Guru

thank you soooo much Semsley!

lor · Guru

thank you attila also! just noticed your not that far away from me, small world hey!

-- Edited by lor on Saturday 17th of July 2010 01:42:55 PM

attilabenko · Guru

Yes, and I have got a lovely kitten as well :)

lor · Guru

hte plot thickens.....the oil suppliers are fraudsters, therefore client has paid but no oil has been received, does anyone know how I should account for this now???. Also I don't think he can claim the vat now, as obviously it was a fraudulent vat no also, so no vat can be claimed now is this also correct>>>>>>

this doesn't happen in the text book lol! or lol not!

-- Edited by lor on Tuesday 20th of July 2010 08:03:53 AM

Wella · Expert

Lor

I am not sure about the VAT but I would guess that no import duty or VAT would be incurred as nothing was actually imported. If he has paid it may be worth checking with HMRC.

I would suspect that the transaction will have to written off as a bad debt. It would probably be a good idea to report it to the police (if it hasn't already been) and get a police crime number to back up the reason.

I am assuming there is nothing dodgy about the client with regard to MLR. Seems like a good way of getting money out of the country

Bill

BackOfficeGroup · Guru

Lor

If your client has made the purchase in good faith and can show this, then the claim for the input vat will stand.

If your client has paid, how did he pay? If paid via the bank etc, then they should be able to trace the money, if cash then no chance!

P

lor · Guru

money transfer - western union.

the purchase has been made in good faith from what I can see as the client has given no reason but to trust him so far..... I know it could still be dodgy but I am taking it as good faith unless otherwise seen or told different.

Also all I have is money transfer receipts, is this enough or do I need to see invoices for the goods, as it is complicated as they have taken his money but has only given him a invoice which has the dodgy company reg on it and dodgy vat no.

BackOfficeGroup · Guru

Lor

OMG, western union money transfer - how much more obvious could it be that this is dodgy!

Get the invoice, keep the payment slips with it and report it it HMRC aswell as the police. How did you find out that its not real and why did your client pay in that way? Madness.

P

attilabenko · Guru

I would think even if you know your clients is not money laundering you still should make a MLR report and file it to the SOCA as well as the above. You can do that online - just have to register - here is a link:

https://www.ukciu.gov.uk/(2hecu0er4ns1rk3xrsdmgce0)/SARonline.aspx

lor · Guru

i have opened a can of worms!,

i will look at that link now, thank you.

BackOfficeGroup · Guru

shouldve gone for the worms in brine, lol

P

lor · Guru

lol

lor · Guru

I have asked the client to call hmrc and the police as he has a better understanding on the situation.

I will await the response he recieves and go from there.

lor · Guru

is reporting to soca something I have to do legally, will I be in troble if I don't do this!.

attilabenko · Guru

well, from the information you provided I would make a report to them and then it would be up to them to decide if they do anything about it or not. You see apart from the cash/western Union transactions i don't see signs of money laundering but this only one could be a strong sign. You never know, maybe your client is deeply in something and on some of these ways trying to get out of situation with legally satisfying results.
Your client would not actually know you were the one reporting him.
Maybe give them a call, explain the situation and ask them if you have to report it to them or not.
In terms of crime they are the experts !

attilabenko · Guru

SOCA phone number 24/7 :
0370 496 7622

lor · Guru

thank you for your replies!

lor · Guru

to update you all, the client has informed HMRC of the situation so at least there should as few a questions as poss when it comes to tax return time!.

thank you for all your help in this - case closed - don't think the client will be making a mistake like this again!