UK VAT: Postponed Import VAT Accounting (PIVA)

08 February 2021

Following Britain’s exit from the EU on 1 January 2021, all goods coming from the EU into GB will now be imports rather than acquisitions.

In theory this means import VAT is due at the point of entry and must be paid to release the goods into the UK.

Whilst the VAT can later be reclaimed on a local VAT return via the receipt of a supporting Form C79, this could have quite a cash flow impact on businesses.

To help businesses with cash flow and to not make the UK an unattractive place to do business, HMRC have introduced Postponed Import VAT Accounting (PIVA), where the VAT can be accounted for as a reverse charge on the UK Import VAT return. There is no need to apply for PIVA but the importer or their agent will have to indicate on the Customs declaration that PIVA will be used so no VAT is charged at the point of entry.

This is done via two different methods, depending on whether you or your shipping agent, are using the CHIEF system or Customs Declaration Service to make your import.

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

On your declaration, you will need to 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’ as the method of payment in Box 47e

If you use the Customs Declaration Service

You will need to enter your VAT registration number at header level in data element 3/40.

VAT will be recorded against your EORI and will be at declaration level only.

In addition to making the initial declaration, you will have to be set up on HMRC’s online systems to obtain the PIVA statement produced in the first half of each month and accessible for 6 months. You should contact your VAT agent to ensure you have access to this and they can prepare your VAT return correctly.

Should you need any assistance in making the relevant registrations with HMRC to gain access to your PIVA statements, or have any queries regarding PIVA, please do not hesitate to contact us.

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