VAT update: Accounting for import VAT on VAT returns

Published: Wednesday 16 December 2020

From 1 January 2021 onwards, all goods arriving in the UK from other countries, whether within the EU or outside, will be classed as ‘imports’.

There will no longer be a requirement for the importer to make a physical payment of import VAT to clear the goods through Customs. The importer will account for the VAT by means of postponed accounting, in essentially the same way as an acquisition of goods from another EU member state is currently processed. 

As evidence for the amount of import VAT to be accounted for and reclaimed, the current C79 certificates will be replaced by a monthly import VAT statement that will be available online for businesses to download and retain.

HMRC has now provided further guidance on how businesses can access these online statements.

The online access service will be opened shortly when the Customs Declaration Service (CDS) is opened more widely. When the service opens, HMRC will publish a new Postponed VAT Accounting (PVA) page on GOV.UK: ’Get your postponed import VAT statement’. From there, importers can access the statement service. 

Businesses that already have access to CDS will go from the new page, straight to a PVA statement page. They will be able to view and download their statements online, once the statements have been created. Businesses without access to CDS will be automatically directed to subscribe to CDS first. 

For CHIEF users, this subscription to CDS will only allow them to access their postponed import VAT statements. They can continue to use CHIEF to make customs declarations. 

The CDS application process is straightforward and takes only a few minutes. Once the application has been processed and accepted, the importer can access their PVA statement page. The new online monthly statements are not available yet. So, users accessing the service will go to a landing page that says, ’There are no statements available to view yet.’ 

From 1 January 2021, when an importer completes the customs declaration (on CHIEF or CDS) and indicates that they will be accounting for import VAT on their VAT Return, that import VAT will be shown on their monthly statement. Statements will be published online in the first half of the month and will show the total import VAT postponed in the previous month.

If your business currently imports to the UK, you should get access to the service as soon as possible as part of your preparation for the end of the transition period. The application can be made here.

For more information on VAT changes pre- and post-Brexit, please contact Julian Millinchamp at julian.millinchamp@hazlewoods.co.uk or 01242 237661.

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Julian Millinchamp
Julian Millinchamp
Indirect Tax Director
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