Completing your VAT Return? – How to deal with Import VAT issues

If your August VAT return is due for completion and you’re a business trying to reconcile your Import VAT through Postponed VAT Accounting (PVA) statements, HMRC’s guidance note update is a timely reminder of the difficulties many have experienced in recent months. Getting to grips with new ways of VAT accounting for imported goods; using the six month delay option for declarations; combined with the internal systems issues that HMRC has faced on producing accurate PVA statements online through the Customs Declaration Service during the months of January and February 2021 has made life “interesting” on the VAT side.

The errors on these earlier PVA statements have been corrected but the whole process has managed to add to the need for increased VAT compliance checks when you are entering VAT values for recovery on importations over the year. The updated guidance note is HERE 

In our work supporting importers over this period, it’s worth adding that for many – including in the online retailing business sector – they continue to use agents to deal with any imports of goods they are bringing into the UK. Unless advised to use PVA by the importer those agents may still be paying import VAT to HMRC on the importer’s behalf and then recharging it to them instead of using PVA and if they are this will trigger the production of a monthly C79 import VAT certificate (C79) by HMRC rather than a PVA statement as evidence of the VAT paid on the importation of the goods into the UK. These C79s are very important to retain as they are the correct VAT evidence to support recovery on the VAT returns. Often businesses are not familiar with this important point and either don’t chase up missing C79s or, on receiving the document in the post (if the HMRC CHIEF system was used) for the import, aren’t aware of the need to retain this piece of paper as a part of their VAT records. A reminder of the C79’s process and how to get them is here 

The business community is settling into new trading patterns as a result of COVID and Brexit and it’s important to ensure that VAT compliance management doesn’t get overlooked on such basic areas as the retention of correct VAT recovery evidence. With Making VAT Digital (MVD) – covering the need for integrated digital links to build up the VAT Return data within accounting systems – now fully rolled out we are recommending to our clients the value of a VAT compliance walkthrough of the VAT Return process including MVD as we move into the Autumn. Most businesses will have submitted two VAT returns under the new rules by this time and it makes sense to ensure that accounting systems are reporting VAT properly to HMRC.

If this article prompts any VAT concerns for you or your clients, then Centurion are here to support. Centurion VAT – for when VAT gets complicated.

For the avoidance of doubt, the content recorded in this news article does not constitute formal advice and we do not guarantee the accuracy of any information provided at the time of reading. It is always recommended that you seek professional advice before acting on any of the news articles or information included.