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What is Postponed Import VAT Accounting (PVA)?

Question:

I have a shipment going to UK and my forwarder advise me that they can release the goods under PVA process? What are the benefit?

Answer:

Postponed VAT accounting (PVA) was implemented from 1 January 2021 as part of the UK Government’s business support measures for Brexit. PVA is a valuable cash aid to importers which do not use customs warehousing to defer VAT payments to HM Revenue & Customs (HMRC).

We thought it important to flag because many businesses are still unaware of what PVA is, or the benefits which can arise from it. Whilst the use of duty deferment accounts (whether an agent’s or the business’ own) can offer up to six weeks’ delay in paying customs duty and import VAT on imports made at the UK border, the use of PVA allows a business to import its goods without any import VAT payment. Instead, the importer can have their goods cleared through UK customs and then account for the import VAT via its VAT returns – rather than at the point that goods are imported into the UK.

That’s basically give the seller a huge advantage from a cashflow perspective as VAT

Can reach to thousands of GBP upon entry

So, How PVA will work All UK VAT registered Importers will be eligible to use PVA?

No authorization will be required. They will simply make the appropriate entry and provide their EORI and/or VAT registration number (VRN) on their customs declaration. This process (subject to customs clearance) will allow the goods to enter into free circulation without up-front payment of the import VAT. The customs declaration will generate an online Monthly Postponed Import VAT Statement OFFICIAL (MPIVS) that will be the evidence required to account for and recover the import VAT as input tax on their next VAT return. (Note: The C79 will continue to be produced for those entries where any VAT is paid on importation). PVA will only be available on declarations where import VAT would ordinarily be due and where goods are being declared to free circulation. Where goods are placed into a customs special procedure, PVA will be available on the declaration that removes them from that special procedure and places the goods into free circulation.