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Policy & Compliance
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175 days to get authorised Whilst the scheme allows for the declaration
A look at how and why postponed VAT accounting has been designed to help importers – but why you should still be cautious
It is June 2021 and it is almost six months since the UK left the Single Market and the Customs Union. Since then, traders have experienced a number of operational issues, had to learn how to use new procedures, build new business models or apply for new trade facilitations. And this moment is important because amongst the trade facilitations introduced to remedy potential issues related to intermediaries’ capacity, one – the Delayed Declarations – proved to be particularly contentious and confusing. Under the scheme, traders are allowed to make customs entries into declarant’s records in order to move goods across the border without prior authorisation. At the same time, they are under the obligation to submit supplementary declarations within 175 days of the import date by either becoming CFSP authorised in their own right or finding an already authorised trader who would be willing to use its own CFSP authorisation on their (the importers’) behalf. And in June, the 175 days mark will have come to pass for those businesses that started using the scheme from the beginning of January. BIFA understands that the number of CFSP applications has increased significantly since the beginning of 2021 but we would still like to
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remind importers and agents using their own authorisation about their obligations.
Postponed VAT Accounting (PVA) in EIDR Delayed Declarations One of the features specific to the Delayed Declarations is the fact that VAT-registered traders will have to use postponed VAT accounting as a method of payment on their entries, leaving them none of the choice that would otherwise be available under other types of declarations, whether full or regular CFSP supplementary declarations. Postponed VAT accounting (PVA) as a policy was designed to help traders at the frontier and to alleviate the cash flow issues that would otherwise arise for traders accustomed to operating within the Single Market. Businesses registered for VAT in the UK are able to account for import VAT on their VAT Returns, which means they do not have to pay import VAT at the UK border. It is important to remember that PVA is only available to UK VAT-registered businesses, while private importers or businesses not registered for VAT will still have to pay import VAT at the point of supplementary declaration submission, even under the Delayed Declarations scheme.
submission point to be delayed for up to 175 days, it is important to remember that importers still have to account for import VAT on their returns. This may potentially result in an incorrect calculation, but HM Revenue & Customs (HMRC) has made provisions for and issued guidance on how to calculate and also amend estimated VAT calculations on future VAT returns.
PVA and C79 Importers using PVA will notice that C79 VAT certificates generated when VAT is paid at the point of entry are not generated when PVA is used. Instead, the importer will need to generate a monthly postponed VAT report from its CDS dashboard with its government gateway account. The process itself is not complicated, but a number of technical issues were reported and consequently importers are encouraged to check their statement more thoroughly than usual.
Summary We do not know, at this moment, whether the Delayed Declarations scheme has achieved its objective. BIFA has always been cautious about using the procedure and advised caution to its Members. What is clear, however, is that the scheme has
certainly contributed to a level of non-compliance at the frontier not seen in many years, so caution is needed more than even before. For additional information issued by HMRC see
www.gov.uk/government/news/hmrc-advises- businesses-importing-goods-from-europe
June 2021
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