UK Import VAT Accounting changes
The UK Government has confirmed UK Import Postponed VAT Accounting (PVA) is to be introduced for all imports on 1 January 2021. This measure was announced in the 11 March 2020 Budget.
When will Postponed VAT Accounting be introduced ?
Postponed Accounting for Import VAT (PVA) is available from 1 January 2021.
Background Postponed VAT Accounting
Postponed Accounting for Import VAT has long been discussed and lobbied for in UK trade and tax circles. In 2019 a UK scheme was welcomed as part of HMRC announcements regarding Brexit Day 1 No Deal, but was later withdrawn.
As recently as early February Michael Gove told industry to prepare for UK import processes without special easements. We wrote about that here. He said trade should expect full import procedures from all origins from January 2021. The inference drawn from this was that all easements announced in 2019 were off the table. The assumption was post accounting for VAT fell away also. However the March 2020 Budget has clearly revived the scheme and it will operate from 1 January 2021.
If you are interested in the scheme as it stood in 2019 HMRC guidance remains available. It gives details on how PVA was intended to operate and for now we assume it still describes how PVA will work in 2021 – watch this space for updates. The HMRC site has not been updated to reflect the 11 March 2020 budget announcement
For more information about Postponed VAT Accounting and how it will affect your business contact us here at Clearlight Customs