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Postponed VAT accounting for import VAT

Following the end of the Brexit transition, VAT on the import of goods into the UK is now collected differently.

The new postponed VAT accounting (PVA) procedure has been introduced for import VAT where, rather than pay the import VAT to HM Revenue & Customs (HMRC) at the time of importation, it is postponed and reported on a VAT return instead. This provides a potentially significant cashflow benefit for importers. There is no formal application procedure; an importer simply tells his shipper or customs agent that he will be using PVA and the agent completes the import declaration accordingly (box 47 – method of payment with code G).

The goods are still declared and cleared through customs and HMRC will be issuing a new document called a Monthly Postponed Import VAT Statement to replace the current C79 form. This will be the necessary documentary evidence for claiming the corresponding input VAT refund.

The postponed import VAT and the VAT refund are entered on the same VAT return, but the new monthly statement of postponed VAT will only be available online for six months. Businesses will need to register with HMRC to access the new online monthly statements through HMRC’s Customs Declaration Service.

If a business does not use PVA but pays import VAT at importation as before, then HMRC have indicated they will continue to issue the C79 import VAT certificates, although it is expected that most businesses will opt for the new PVA.

The rules for imports into Northern Ireland are different for shipments from the Great Britain mainland, from the EU or from outside the EU. That said, the UK Government and the EU are currently in discussions about simplifying the requirements of the Northern Ireland Protocol, so this is possibly fast-moving.

Where a foreign supplier sends goods under £135 to final consumers in the UK, there is no import VAT, but the foreign supplier will have to register for UK VAT and charge normal UK sales VAT instead.

All these new procedures are subject to regular change and amendment as the UK’s position settles down outside the EU.

Would you like to know more?

If you would like to learn more about how Brexit may impact you, please visit our Practical Guidance: Brexit hub here.

And if you have any questions or would like to discuss your specific circumstances, please get in touch with your usual Blick Rothenberg contact or Simon Newark using the details on this page.