Postponed VAT Accounting

HMRC is encouraging VAT-registered businesses who import goods into Great Britain from anywhere outside the UK, or into Northern Ireland from outside the UK and EU, to act now so that they can benefit from postponed VAT accounting.

HMRC has sent the below message about postponed VAT accounting.

“We are encouraging VAT registered businesses who import goods into Great Britain (England, Scotland and Wales) from anywhere outside the UK, or into Northern Ireland from outside the UK and EU to act now so that they can benefit from postponed VAT accounting (PVA).   

PVA allows them to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later. We have published guidance on GOV.UK, which explains:

• when to account for import VAT on your VAT Return
• how to complete your VAT Return to account for import VAT

Businesses won’t need approval to benefit from PVA, but they will need to access the Customs Declaration Service (CDS) to view and download their monthly statements (in PDF format).   

They need these statements to complete their VAT returns or to send them to whoever completes the VAT return on their behalf.   

Businesses should subscribe to the new service as soon as possible to get a postponed import VAT statement online.

Importers that already have access to CDS will go straight from the new service, to their CDS financial dashboard where they can view and download their statements. Businesses without access to CDS will be automatically directed to subscribe to CDS first.  

CHIEF users who subscribe to CDS to access their statements can continue to use CHIEF to make customs declarations.  

Signing up for CDS is straightforward and takes only a few minutes. Businesses will need details of their:

• Government Gateway user ID and password
• Economic Operator Registration and Identification (EORI) number that starts with ‘GB’.  
• Unique Taxpayer Reference (UTR) - find your UTR if you do not know it 
• Address  
• National Insurance number (if they are an individual or sole trader) 
• The date they started their business. 

A common error is inputting the address incorrectly.  If the address on the application is not identical to the address that we hold, there will be delays in the processing.  To avoid this, businesses should check all the details they plan to input, and make sure the address we hold is correct and up to date.    

When an importer completes the customs declaration (on CHIEF or CDS) and indicates that they’ll be accounting for import VAT on their VAT Return, that import VAT will be shown on their monthly statement.   

CHIEF users will need to enter: 

• their EORI number starting with ‘GB’ which includes your VAT registration number into box 8 (Header Consignee), or, if applicable, your VAT registration number in box 44h (Registered Consignee) 
• ‘G’ as the method of payment in Box 47e 

CDS users need to enter their VAT registration number at header level in data element 3/40. VAT will be recorded against the EORI and will be at declaration level only. 

The first monthly PVA statements will be available in early February showing the total import VAT postponed in January.  Businesses should sign up to CDS now so that they are ready to complete their first VAT return under the new rules. 

Until the end of June, importers bringing non-controlled goods into Great Britain from the EU must account for import VAT on their VAT return if they choose to: 

• delay their customs declaration or  
• use a simplified customs declaration to make a declaration in their own records. 

There is more information on how to do that on GOV.UK.”