Importers missing out on cashflow benefit
Postponed VAT Accounting (PVA) was devised ahead of Brexit, to avoid the negative cash flow impact of an additional VAT bill at the EU/UK border, but the simplification is not limited EU shipments and offers potential cost savings and cashflow benefits for all shipments.
Since the 1st January 2021, businesses registered for VAT, can use postponed VAT, to account for the VAT on their periodic VAT Return, on all their imports (EU and non-EU) rather than paying it immediately at the border.
If your business already imports from outside the EU, Postponed VAT Accounting removes the need to account for the import VAT as part of the customs clearance process and to pay your agent for using their deferment account, offering you significant cash flow benefits.
PVA is compulsory if custom declarations submissions are currently deferred and providing you are VAT registered, no specific approval or accreditation is required, but you or your agent must select PVA on the customs declaration.
Because PVA is not limited to EU imports you need to press your agent, in the strongest terms, if they have failed to provide you with clear direction on the use of PVA and that it can also be used for imports from the rest of the world, particularly if they have been charging you a fee for making VAT payments.
We are totally committed to driving our customers success and helping them enhance the ability to trade and grow internationally, which is why we have been advising and directing them on using PVA for all relevant imports.
If you have not already taken this development into your own import processes, would like further information, or discuss your situation in greater specific detail, please EMAIL our managing director, Colin Redman, directly.