What is postponed VAT, and should I use it?

What is postponed VAT, and should I use it?

5.5.2021 | Industry matters

What is postponed VAT, and should I use it?

Often asked about using postponed VAT accounting (PVA) for customs declarations, Steve Townley, head of customs at Jordon, shares his views on the pros and cons of the system, as well as the latest updates from HMRC. 

I have heard about PVA, but I’m not sure if it’s for me. Why should I use it, and where can I find out more about it?
PVA allows UK VAT registered importers to account for and recover import VAT on their VAT return. PVA is available permanently. We expect that most businesses will choose to use it because it provides significant cash flow benefits compared to the alternative of paying the import VAT when the goods are imported.

Different rules apply in different situations. In some cases, you must account for import VAT on your VAT return – for example, if you delay your customs declaration.

New Trade Rules.

How do I tell HMRC that I want to use PVA?

There isn’t an application process for PVA, and you do not need to tell HMRC in advance if you want to start accounting for import VAT on your VAT return. You need to confirm in your customs declaration that you are using PVA.

If you use the Customs Handling of Import and Export Freight (CHIEF) system

On your declaration, enter:
• your EORI number starting with ‘GB’ which includes your VAT registration number into box 8 (Header Consignee), or, if applicable, your VAT registration number in box 44h (Registered Consignee).
• ‘G’ (Postponed accounting for VAT approved) as the method of payment in Box 47e.

If you use the Customs Declaration Service (CDS)
On your declaration, enter:
• your VAT registration number at header level in data element 3/40.

Please note that VAT will be recorded against your EORI and will be at the declaration level only.

If someone else is making your customs declarations for you, such as a freight forwarder, customs agent, broker, or fast parcel operator, you must tell them you want to use PVA. Tell them that you want to use PVA to account for import VAT on the imported goods so they can complete the customs declaration correctly on your behalf. Keep a written record of what is agreed for your records.

Whoever completes the declaration must take care when selecting how to account for import VAT on the customs declaration, as this cannot be changed once the declaration has been submitted.

How do I complete my VAT return if I am using PVA?

After you have selected PVA on your customs declaration, you will need to account for import VAT when you complete your VAT return.

To complete your VAT return, you will need:
• details of any customs entries you have made in your own records.
• copies of your monthly postponed import VAT statement, when available.

Unless you have delayed your customs declaration, each of your statements will show the total import VAT postponed for the previous month.

If you are delaying your customs declarations:

• you must account for import VAT on the return, which includes the date you imported the goods.
• to complete the boxes on your return, you will need to estimate the import VAT due from your imported goods records.
• when you submit your delayed declaration, you must select that you’re accounting for your VAT on your return.

Your next online monthly statement will show the amount of import VAT due on that declaration. You’ll then be able to:

• adjust your estimate.
• account for any difference on your next return.

How do I get the statement I need to complete my VAT return?
If you account for your import VAT on your VAT return, you’ll need to get a postponed import VAT statement online.

Unless you have delayed your customs declaration, each statement will show the total import VAT postponed for the previous month.

Your statements will usually be available to view by the sixth working day of the month.

To view your statements, you’ll need a Government Gateway user ID and password, which is linked to your EORI number. If you do not have a user ID and password, you can create your account on GOV.UK.

To find out more about using postponed VAT accounting (PVA), contact the Jordon team on 01394 286544 or email steve.townley@jordonfreight.com

“Don’t put off until tomorrow what you can do today.”

“Don’t put off until tomorrow what you can do today.”

19.4.2021 | Industry matters

"Don't put off until tomorrow what you can do today"

Miles Vartan, director of compliance specialists VARTAN Consultancy offers his thoughts on life now we’re out of Europe.

Traders need to get used to how to trade with the EU now rather than the Government repeatedly pushing back deadlines.

To ease the introduction of customs formalities and allow traders to manage their businesses through the pandemic, the UK government decided to phase in customs requirements for GB imports from the EU between January and July 2021. In March 2021, it announced it was further delaying the introduction of full import checks, on average by six months. It was stated that this delay was brought about by businesses having to face dealing with coronavirus and Brexit simultaneously and because the UK government still has work to do to enable traders to be ready.

On the 1st of January 2022, all imports into the UK will need to have a frontier declaration submitted prior to the consignment leaving the EU. This is the day that the number of customs clearance entries will increase by at least 360% – you have a choice; find a Customs Agent or learn how to do this work yourself; otherwise, plan for delays at the Border whilst you wait for your consignments to be cleared.

Delays continue to be experienced on exports to the EU with traders and customers. Both who had previously become used to relatively easy next-day delivery are now often having to wait two weeks for a delivery to be made successfully and work out what duty and VAT will be paid.

“Don’t put off until tomorrow what you can do today.” ~ Benjamin Franklin,  Founding Father of the United States of America.

Find out how VARTAN can help your business navigate the fall out from Brexit.

Is KAP fit for Purpose?

Is KAP fit for Purpose?

24.11.2020 | Industry matters

Is KAP fit for purpose?

 

As a European freight forwarding specialist, we have had a keen eye on Brexit for four years now, and finally, it is all coming to a head. At least we are prepared. However, we can’t say the same for the facilities we will be required to use.

Jordon was asked by the Border & Protocol Delivery Group (BPDG) to form part of an initial group tasked with understanding the advice the BDPG was preparing for hauliers in relation to the UK government’s capacity initiative ‘Check an HGV is ready to cross the border’, formerly known as Smart Freight, for vehicles to obtain a Kent Access Permit (KAP) en-route to Dover or Folkestone.

Friday 6th November saw key members of the Jordon operations, customs and sales teams assembled to meet with members of the BPDG to provide feedback and outline where we believed there were issues with the process.

While we spent 1.5 hours working our way through the document, much of it wasn’t clear until we were guided to paragraphs where the often-ambiguous answer lay.

In a time-sensitive industry where vast amounts of information and administration are suddenly going to be introduced, a straightforward A-B shipment is going to become an administrative nightmare for all involved, and the KAP simply adds to that burden.

In this case, the haulier, probably EU based and already struggling to understand new customs responsibilities, now must complete this online form for each outbound movement. Whilst the instructions are already tricky to understand; you will also need to sign up for a government gateway ID! In your cab? Then you must provide the legally binding information, of where this responsibility lies is up for debate. Hauliers will be fined £300 for misinformation.

The meeting gave us the opportunity to feedback on how we believe the system could be improved. However, Brexit, the sheer number of vehicles involved, and all the new red tape that leaving the EU entails, means there is no easy workable solution going forward. Maybe sight of a working GVMS (Goods Vehicle Movement System) would have thrown up some ideas, but alas it won’t be ready in time.

To us, it feels like a system devised to stick a wet plaster on the deeper problem, caused by a lack of engaging with industry to get this crucial border element right. As we speak the rushed 27-acre lorry park in development in Kent sits flooded. Who could have predicted that?!

By Jon Swallow, Jordon

www.jordonfreight.com 

Tax expert dispels common myths about VAT once Brexit transition period ends

Tax expert dispels common myths about VAT once Brexit transition period ends

24.11.2020 | Industry matters

VAT once Brexit period ends

 

With the Brexit transition period concluding at the end of December it has left SME’s asking what will happen with VAT when the transition period is up?

 

Andrew Diver, head of taxation at accountants Beatons Group, dispels a few VAT myths.

Will the UK cease VAT as a result of leaving the EU?

No, but the UK VAT and EU VAT will be different.
The UK government will be able to charge different rates for products and services and the UK will not be able to use any of the simplification arrangements in the EC such as MOSS (Mini One Stop Shop).

If my business provides services to customers based in countries in the EU, will there be no VAT?

No, if you are supplying services to a non-business customer in the EU then potentially you will be liable to UK VAT on the value of the supply.

Does my business need to register for VAT in the different EU countries we have customers?

If the customers are businesses registered for VAT in the local country (and you need to keep evidence of this) then you will be able to reverse charge the supply.
If they are not registered for VAT in their country, then you may need to register.

Will businesses based in the EU need to register for UK VAT?

Potentially. It will depend upon whether they supply to UK businesses and whether those UK businesses are VAT registered and can benefit from the reverse charging. If not, they may need to register for UK VAT.

Is it the end of EC Sales lists and Intrastat returns?

No, while EC sales lists will cease from January 1, 2021, Intrastat returns will be required for those importing goods from the EU to aid tracking those deferring customs declarations.
Businesses in Northern Ireland will need to continue Intrastat returns up until 2025 under the Northern Ireland Protocol, but those businesses only exporting to the EU (no imports) will not need to make any Intrastat returns.

Andrew Diver added: “This information is for guidance only and would advise firms to seek full tax advice specific to their circumstances before the end of the transition period.”

By Andrew Diver, Beatons Group

www.beatons.co.uk