Accounting for import VAT on the VAT return – sometimes known as postponed VAT accounting (PVA) – hasn’t been without its problems. Here are some tips to help you deal with it.
Postponed VAT accounting is not time-limited; it is a permanent cash flow concession, applicable to EU or rest of world trade. This means that, rather than paying the VAT at the time of import and recovering it later, you declare and recover the VAT on the same return. No prior approval is required.
If you use an intermediary such as 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. Be specific if you want to use PVA to avoid any potentially expensive confusion and keep a written record of your instructions.
Using PVA requires that you access a monthly postponed import VAT statement which you can obtain online via the Customs Declaration Service (CDS). You will need to use the CDS, even if you make the actual declarations through the Customs Handling of Import and Export Freight (CHIEF) system. The very first time you access the CDS, you will be asked for certain initial information, such as your EORI number.
Statements are usually available to view by the sixth working day of the month. They are provided in PDF format. Note that they are only available online for six months from the date they are published. To support your VAT return, and provide a compliant audit trail, download and retain a copy of each statement.