Import VAT made easy

Postponed VAT Accounting

Since Brexit, lots of businesses have felt the impact of the administrative burden of trading overseas, with importing goods and accounting for the import VAT being no exception. You may already be familiar with receiving documents from your freight forwarder, detailing “government charges”, paying for the import VAT and then later receiving a C79 in the post. This can get quite confusing. However, in an attempt to ease some of the processes of importing goods, VAT registered businesses can take advantage of the new Postponed VAT Accounting (PVA) system.

We really encourage all VAT registered businesses to sign up for PVA. This is the easiest and most straightforward way of importing goods.

PVA works in a similar way to reverse charge in that you are not required to part with any cash. This means that that there is a cashflow advantage as you do not have to pay for the import VAT on delivery of the goods, not to mention that your goods are not held up at the border pending your payment. Furthermore, processing import VAT through PVA avoids the administrative hassle of waiting for the C79 before reclaiming the VAT.

Once signed up with PVA, businesses can simply download a statement online. This will show the import VAT suffered in the month. An adjustment can then be put through the VAT return in Box 1 and Box 4 (i.e. in and out).

N.B.

Import duty is different to import VAT. Businesses are unable to reclaim import duty. However, there is no duty on goods that originate from the EU.