If you are a business owner, then by now, you will be more than aware that life outside of the EU can make running a company that imports goods far more complicated. Why? Because import VAT applies to the value of most goods that come in.

How Can Businesses Deal With The Import VAT?

As a company owner, there are three options available to deal with this import VAT. The UK buyer will need to communicate clearly to their freight agent which of the following will apply:

  • The freight agent pays the import VAT, allowing the goods to be released from UK customs. The freight agent will then recharge these costs to the UK buyer along with an admin fee.
  • The UK agent has their own VAT deferment account, and the freight agent uses this account to release the goods without having to pay VAT. HMRC will then take the VAT payment by direct debit around 45 days later.
  • The UK buyer uses postponed import VAT accounting (PIVA) and instructs freight agent that PIVA is to be applied when goods enter the UK. The goods are then released with the freight agent or buyer, paying HMRC and buyer accounts for the import VAT as a reverse charge entry on their VAT return.

In all of the instances above, import duty may also be due on the goods alongside VAT. If the UK buyer decides to use PIVA, they do not need to ask HMRC in advance. However, they will need to register with HMRC to access the monthly PIVA statements from an online account, which will be required to complete VAT returns. The PIVA statements for the previous calendar month are available to view from the sixth working day of the following month. These statements should be downloaded regularly as they are only held online for six months.

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How To Access The Registration System

The registration system can be accessed by clicking here then going onto the ‘Start Now’ button. On the next screen, you will need the business’ Government Gateway ID and password, along with your EORI number to hand, which will be needed for any business imports.

If you need help with getting your VAT returns right using PIVA, please do not hesitate to get in touch with our team. Please note you will need to download the statements showing your import VAT.