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UK Postponed Import VAT Accounting (PVA) | Ultimate Guide

This guide will explain what UK Postponed Import VAT Accounting (PVA) is, how it affects sellers and how to deal with it.
UK Postponed Import VAT Accounting (PVA) ,What is Postponed Import VAT Accounting (PVA)?Will applying for Postponed VAT Accounting (PVA) affect sellers?Who should be responsible for helping sellers apply and process?

Table of Contents

Since the start of British VAT reform on January 1, 2021, how to refund the tax has been the most concerned issue for sellers. Some seller friends have asked some questions about the Postponed VAT accounting.

What is Postponed Import VAT Accounting (PVA)?

Will applying for Postponed VAT Accounting (PVA) affect sellers?

Who should be responsible for helping sellers apply and process?

What is Postponed VAT Accounting (PVA)?

Postponed VAT accounting abbreviation PVA。

To put it simply, you do not need to pay the import VAT first and then deduct it during customs clearance. Instead, you can just reflect the import VAT amount when you declare it.

What is the background of the PVA policy?

The Online marketplace (OMP platform) withholding and payment policy is officially implemented on January 1, 2021.

For goods sold by sellers through the OMP platform, the platform will collect and remit sales VAT at the standard tax rate. In order to reduce the seller’s capital occupation, ease the pressure on capital flow , and improve the efficiency of the British IRS in collecting value-added tax on imported goods.

The British IRS launches the PVA policy, which can Postponed Import VAT and other taxes.

British IRS website, UK Postponed Import VAT Accounting (PVA)

Which sellers can apply for Postponed VAT Accounting?

Currently, all the sellers with British VAT can apply for Postponed VAT Accounting.

How to apply for/use Postponed VAT Accounting?

The sellers do not need to apply for it by themselves. You can entrust the freight forwarder to choose Postponed Import VAT during customs clearance. Currently, HMRC provides two application methods for the customs clearance system:

  1. Use the customs system for import and export goods (CHIEF) for customs clearance;
  2. Use the electronic customs declaration Service (CDS) for customs clearance.

The freight forwarder can help you to apply for Postponed Import VAT Accounting directly during customs clearance according to your customs clearance system.

What information is required to apply for Postponed VAT Accounting?

Generally speaking, freight forwarders will require the following information:

  1. Valid VAT record;
  2. Customs clearance power of attorney (the power of attorney template is provided by the freight forwarder);
  3. VAT registration information form.

Does the seller need to pay import VAT after applying for Postponed Import VAT Accounting?

According to the information on British HMRC official website, if you have registered for VAT and chosen the Postponed Import VAT Accounting, you can just state your import VAT on the VAT return without paying it.

Is it recommended to apply for Postponed VAT Accounting?

According to the perspective of the policy, Postponed Import VAT Accounting will reduce the seller’s capital occupation. And there will be no problem of import VAT refund in the future. Which is a good thing for both the British IRS and Chinese sellers.

Is there any change in traditional customs clearance method?

The traditional customs clearance method has not changed for the time being. You can pay the Import VAT normally, and apply for the refund of import VAT through declaration later.

All in all, you can ask your freight forwarder to help you to choose postponed VAT accounting . If you have chosen the import postponed VAT accounting, you do not need to pay import VAT.

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