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Autumn 2021

Post Brexit teething problems with import VAT

Accounting for import VAT on the VAT return, sometimes known as postponed VAT accounting (PVA), hasn’t been without its problems. We offer some practical advice.

Tip 1. PVA isn’t time-limited: it’s a permanent cash flow concession, applying to EU or rest of world trade. It means that rather than paying the VAT at the time of import, and recovering it later, you declare and recover it on the same VAT return. No prior approval is required.

Tip 2. If using someone like a freight forwarder, customs agent or fast parcel operator to import goods on your behalf, make sure they know how to deal with your import VAT. Make it clear if you want to use PVA, to avoid potentially expensive confusion. And keep a written record of your instructions.

Tip 3. Using PVA means you need to access a monthly postponed import VAT statement. This is obtained online, via the Customs Declaration Service (CDS). And it’s CDS you need, even if you use the Customs Handling of Import and Export Freight (CHIEF) system to make the actual customs declarations. The very first time you access CDS, you will need to supply certain initial information, like your EORI number.

Tip 4. Statements are usually available to view by the sixth working day of the month and are provided in pdf format. But – and it’s a big but – they are only available online for six months from the date that they’re published. So to support your VAT return and provide an audit trail for compliance purposes, download and keep a copy of each statement in your records.

We are happy to provide further detail on how PVA works, when the scheme can – or must – be used, and how to complete the VAT return. Please don’t hesitate to get in touch.

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