From 1 January 2021, goods purchased from EU are classed as imports.

To make it easier for businesses to report and pay import VAT, the UK now offers a system of postponed VAT accounting (PVA).
This allows businesses to account for the VAT from goods imported from EU, as well as the rest of the world, on their VAT Return, rather than paying it immediately as the goods enter the UK.
This process reduces the impact on cash flow, as import VAT is not paid over to customs and the only action taken is a VAT adjustment, which is made within the VAT Return.
Therefore, if a business is registered for VAT in the UK, import VAT can be accounted on the VAT return for goods imported into Great Britain (England, Scotland & Wales) from anywhere outside the UK.
While many businesses are enjoying this new system, it has become clear that certain businesses are still not benefiting from this cashflow benefit.
We have found that many of our clients are unaware that they need to complete a box in their import documents, which indicates that they do not have to pay the import VAT to release the goods into the UK.
This small, but important step, seems to be missed by many businesses. This will mean that you as a business will have to pay the import VAT and reclaim it back via the C79 form and your VAT return, therefore, potentially leaving you with a wait of up to four months to reclaim the money.
Therefore, we advise that you liaise with your customs agents and/or intermediary and tick the postponed accounting box when completing declarations.
If you need advice or support with postponed VAT accounting, please speak to our team today.