Postponed VAT Accounting – issues with online statements
Carolyn O’Shea · May 15th 2023 · read
Import duty and VAT is payable when goods are imported into the UK.
Who pays the duty and VAT?
The duty and VAT can be paid by you or your freight forwarder in order for the goods to be released at the border.
When and how should the duty and VAT be paid?
The duty and VAT can either be paid when each import arrives at the border, or via a duty deferment account held by you or your freight forwarder or Customs broker.
What is Postponed VAT Accounting (PVA)?
VAT can be paid via Postponed VAT Accounting (PVA). If you use PVA, the import VAT is paid and reclaimed (subject to usual input tax restrictions) on your next VAT return. Consequently, PVA provides a cashflow advantage in comparison to paying the import VAT when your goods are at the border and reclaiming as input tax on your next VAT return (providing a C79 supporting document has been received).
The import VAT payable via PVA is collated by HMRC and included on PVA monthly statements. These statements are not sent directly to you and must be downloaded from the Customs Declaration Service (“CDS”) website and retained within your business VAT records. The import VAT stated on the PVA monthly statement must be declared on the VAT return covering the period in which the goods were imported. The import VAT is declared via box 1 and is reclaimed (subject to usual input tax restrictions) via box 4 of the same VAT return. If you are entitled to full recovery of the import VAT, this does not result in a payment to HMRC.
PVA processing issues
HMRC are aware of several processing issues which may arise when using postponed VAT accounting, and on the supplied monthly statements themselves.
What are the solutions?
Specific entries missing from your statement
If you are a member of a VAT group (or closely related to another company), the entry may show on another company within that group’s statement.
If an agent completed your customs declaration, ask them to confirm the import VAT was allocated to the correct EORI number.
Some entries on monthly statements are duplicated, showing the same movement reference number and VAT amount on each entry. To correct this, you should make a manual adjustment on the statement and account for the revised amount of import VAT.
Declarations made on 30 December 2022
HMRC experienced a technical issue on the above date and the import VAT stated on the PVA statement for declarations submitted on 30 December 2022 may show a higher amount of import VAT than expected. In this circumstance, you should make an appropriate adjustment to records to account for the correct amount of import VAT on your VAT return. You can estimate the import VAT by using the information on customs form C88.
If you cannot access your statements
If you cannot access your statements, you can estimate your import VAT. It is important that your estimate is as accurate as possible and should include any other costs you agreed to cover as well as the base amount paid for the goods (including packaging, transport, or insurance fees).
You should then contact the imports and exports helpline. Once you can access your statement, you should make adjustments within your VAT accounting records to reflect any differences to your estimate and account for these on your next return.
If you use simplified declarations for imports
If you have been granted authorisation to use simplified declarations for imports, you should submit supplementary declarations for goods imported during the previous month within the first few days of the next month. HMRC have been made aware of an issue where some of these supplementary entries are not allocated to the correct monthly statement. Although HMRC are seeking a solution, your current options to resolve this are:
- Use the figures on your import VAT statements to complete the VAT return.
- If you can identify the affected entries, reallocate them to the correct monthly statement and use these figures to complete your VAT return.