UK Brexit Postponed VAT Accounting PVA and VAT return

  • Jan 1, 2021 | Richard Asquith

The UK left the EU VAT regime on 31 December 2020. The UK introduced on 1 January 2021 a deferred import VAT scheme – Postpone VAT Accounting (PVA) – so traders importing goods into the UK do not have to make cash payments of import VAT.

This can be recorded through a UK VAT return, which is completed by all UK VAT registered businesses – both UK resident and non-resident.

Monthly postponed vat accounting import VAT statement

Traders using deferred import VAT payments can access a postponed import VAT statement online of all their imports where they opted to postpone the import VAT through the customs clearance paperwork. Each statement shows the total import VAT postponed for the previous month.

The statements are available to view in the first half of each month. They are only available for 6 months from the published date, so it must download and a copy kept in records. The statement is accessed through CDS customs system. For traders still on the CHIEF system, they may apply for a CDS login for the PVA monthly statement.

Completing Brexit Postponed VAT Accounting import VAT return

The statement can then be used for reporting in the subsequent monthly or quarterly UK VAT return as follows:

Box 1  - Total VAT due in this period on imports accounted for through postponed VAT accounting.

Box 4 - Total VAT reclaimed in this period on imports accounted for through postponed VAT accounting.

Box 7 - Total value of all imports of goods included on your online monthly statement, excluding any VAT.

Traders can account for import VAT if:

  • the goods imported are for use in their business
  • where using a GB or XI EORI number in the customs declaration
  • a UKVAT registration number is included in the customs declaration

If traders initially declare goods into a customs special procedure, they can account for import VAT on their VAT Return when they submit the declaration that releases those goods into free circulation from the following special procedures:

  • customs warehousing
  • inward processing
  • temporary admission
  • end use
  • outward processing
  • duty suspension

Traders can account for import VAT on the VAT Return when they release excise goods for use in the UK - also known as ‘released for home consumption’. This includes when goods are released from an excise warehouse after being in duty suspense since the point of import.

Import Consignments not exceeding £135

The UK's HMRC now requires since 1 January 2021 ecommerce sellers, or their facilitating marketplaces, to charge VAT at the point of sale on imported goods (consignments) not exceeding £135. This is instead of paying import VAT. At the same time, the existing VAT exemption on parcels not exceeding £15 was removed.

Explore more content like this in our Brexit hub

Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is the former VP Global Indirect Tax at Avalara
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