Category: Customs

Are you ready for the Customs Declaration Service (CDS)?

Customs
By AVASK
Date Updated:
Date Published:

The new Customs Declaration Service (CDS) is mandatory for all UK import clearances from 1st October 2022.

Until recently, HM Revenue and Customs’ (HMRC) Customs Handling of Import and Export Freight (CHIEF) system has been at the forefront of customs declarations in the UK.

But the existing CHIEF customs declaration system is closing in the UK, with the last day of operation being today, September 30th. All import declarations from October 1st onwards will need to be submitted via the new Customs Declaration Service (CDS).

To avoid the risk of being unable to import goods into the UK from tomorrow (October 1st ), you must be signed up with CDS.

Why is CDS sign up necessary?

CDS is a system that HMRC have developed to process customs declarations in a highly efficient manner. It is founded on world-leading technology and has been implemented in line with government plans to have a fully digitalised border.

But how will this new cutting-edge system change customs declarations in the UK from October 1st? Let’s take a closer look.

C79 certificates will no longer be sent in the post

If you physically pay import VAT at the border, a C79 certificate is produced and posted by HMRC to detail the receipt of the import VAT payments. These certificates are then required to make a lawful reclaim of import VAT.

From October 1st, C79 certificates will no longer be sent in the post – instead, a digital version of the C79 certificate will be uploaded to the trader’s dedicated Customs Financial Account.

The trader will have access to this once the sign up for CDS has completed and it is vital that C79 certificates are easily accessible.

Digital PVA statements

As well as digital versions of C79 certificates, the Customs Financial Account will also house digital versions of Postponed VAT Accounting (PVA) statements. These statements are necessary for the accurate declaration of import VAT where PVA has been utilised at the border.

Dedicated cash account

Finally, a dedicated cash account will be available to the trader within their Customs Financial Account. The cash account can be topped up and used for payment of import VAT/duties automatically, should the trader opt for this. Authority can also be granted for a shipping agent to use this on the trader’s behalf.

Why are you still physically paying import VAT? Utilise PVA!

Postponed VAT Accounting (PVA) has been available to traders in the UK since January 2021.

When PVA is utilised, traders importing goods into the UK do not have to make physical cash payments of import VAT when goods reach the border. Instead, PVA allows for the payment of import VAT to be postponed, to be accounted for on the UK VAT return as VAT payable and VAT reclaimable, resulting in a NIL effect.

PVA removes the requirement of physically paying the import VAT up-front at customs. It will be reclaimed on the UK VAT return via C79 at a later date.

Simply advise your shipper that this is your preferred method of clearance to utilise the obvious cash-flow benefits of PVA.

How can AVASK help?

Whether you continue to pay import VAT at the border or opt for PVA, you must register for CDS to continue efficiently importing into the UK.

If you do require assistance with the CDS registration process, our team of experts can assist with registration and can execute this process on your behalf. AVASK has a dedicated customs team which can help with all your customs declarations needs, leaving you to focus on running your business.

Get in touch:

Tel: +44 (0)23 8060 0120
Email: enquiries@avask.co.uk

A Guide to Postponed VAT Accounting (PVA) for E-Commerce Sellers

Customs
By AVASK
Date Updated:
Date Published:

If you’re an e-commerce seller who sells goods in the UK, you may have heard of Postponed VAT Accounting (PVA). This scheme is designed to simplify the process of paying VAT on goods imported into the UK, and it can benefit e-commerce sellers in several ways. In this blog post, we’ll take a closer look at how the PVA scheme works, who is eligible to use it, and the benefits it can offer to e-commerce sellers.

What is Postponed VAT Accounting (PVA)?

Postponed VAT Accounting (PVA) is a scheme that allows businesses to account for import VAT on their VAT return rather than paying it upfront when their goods reach the border. This means that businesses can defer the payment of import VAT until their next VAT return is due, which can help with cash flow and reduce administrative burdens.

Who is Eligible for the PVA scheme?

The PVA scheme is available to all VAT-registered businesses in the UK that import goods for use in their business.

Businesses based in Northern Ireland are still considered part of the EU VAT area and therefore do not need to pay import VAT on goods imported from the EU. The reverse charge will still apply. 

Benefits of PVA for E-Commerce Sellers

There are several benefits of the PVA scheme for e-commerce sellers who import goods from outside the EU. Here are some of the key advantages:

Improved Cash Flow

One of the biggest benefits of the PVA scheme is that it can improve cash flow for businesses. By deferring the payment of import VAT until the next VAT return is due, businesses can free up cash that would otherwise be tied up in VAT payments. This can be particularly beneficial for e-commerce sellers who sell high volumes of goods and have tight cash flow constraints.

Reduced Administrative Burdens

The PVA scheme can also help to reduce administrative burdens for e-commerce sellers. By accounting for import VAT on their VAT return rather than paying it upfront at the time of import, businesses can simplify their VAT reporting processes. This can save time and reduce the risk of errors in VAT reporting.

Competitive Advantage

Using the PVA scheme can also give e-commerce sellers a competitive advantage over competitors who are not using the scheme. By deferring the payment of import VAT, businesses can reduce their costs and potentially offer lower prices to customers. This can help to attract new customers and increase sales.

How Does PVA Work?

Under the PVA scheme, businesses can defer the payment of import VAT until their next VAT return is due. This means that instead of paying import VAT upfront at the time of import, businesses can account for the VAT on their VAT return and pay it at the same time as the VAT due on their domestic sales.

To use the PVA scheme, businesses must include the import VAT they are deferring in their VAT return. They must also keep records of the imported goods, including the date of import, the value of the goods, and the amount of import VAT due.

How to utilise the PVA scheme in the UK

The PVA scheme was introduced in the UK in January 2021, following the UK’s departure from the EU. Prior to this, businesses importing goods from outside the EU were required to pay import VAT at the time of import. The scheme is optional, so you are still able to pay VAT upfront at the border if you’d prefer.

How to use PVA in the United Kingdom:

  1. Ensure you are registered for the Customs Declaration Service (CDS)
  2. Include the following information on the customs declaration form:
    • Your EORI number
    • Your UK VAT registration number
    • Put code ‘FR1’ in Box (3/40)
  3. If you use PVA instead of a C79 document, you will get an online schedule of imports to download monthly.

Whether you continue to pay import VAT at the border or opt for PVA, you must register for CDS to continue efficiently importing into the UK.

If you do require assistance with the CDS registration process, our team of experts can assist with registration and can execute this process on your behalf. AVASK has a dedicated customs team which can help with all your customs declarations needs, leaving you to focus on running your business.

Postponed VAT Accounting in France

From January 2022, France made Postponed VAT Accounting mandatory for all VAT registered businesses under the standard French VAT regime.

To find out more information, read our blog post about the changes to import VAT in France

Postponed VAT Accounting in the Netherlands

Traders can defer payment of import VAT at the border by obtaining an article 23 licence, issued by the Dutch tax authorities. With this permit, VAT payment is delayed until you file your VAT return. To obtain an article 23 licence, businesses must meet specific legal requirements and a deposit may be required.

For non-Dutch importers, you are not able to directly apply for an article 23 permit and instead a tax representative must be appointed to file for the permit.

The fiscal representative is then responsible for the following (where applicable):

  • Completing and filing your VAT return within the time frame
  • Completing the intra-community transaction declaration
  • Ensuring the reverse charge mechanism is applied

Conclusion

The PVA scheme is a valuable tool for e-commerce sellers who import goods from outside the EU. By deferring the payment of import VAT until their next VAT return is due, businesses can improve cash flow, reduce administrative burdens, and gain a competitive advantage. If you’re an e-commerce seller who imports goods from outside the EU, you should consider using the PVA scheme to simplify your VAT reporting processes and improve your bottom line.

Watch our YouTube video to find out more about the PVA scheme and how it can benefit you as a seller:

Get in touch

Tel: +44 (0)23 8060 0120
Email: enquiries@avask.co.uk

Keep your goods moving across the EU and UK border

Customs
By AVASK
Date Updated:
Date Published:

New changes to European customs legislation could affect your business from the 1st January 2022

From the start of 2022, full import declarations will be required at point of entry into the UK, which applies to all goods being imported.

2021 saw the end of the easement using CFSP EIDR, more commonly known as deferred declarations, in its current form. While this change may appear unsettling to many e-commerce business owners, AVASK can walk you through the new process within this blog article. If you have any further questions, a member of the AVASK team will always be available to advise and support your business.

Our first main point to mention is that supplementary declarations are now only permitted if you can receive authorisation from HMRC beforehand.

Customs checks will additionally occur on all goods imported from the EU. This will involve full customs border controls on any products selected for a documentary or physical examination. So make sure you are prepared well in advance.

What key areas will customs focus on?

  • Data quality on commodity codes;
  • Product origin (especially if claiming preferential origin as part of the EU-UK trade deal);
  • Product valuation.

The border checking process can be complex and difficult to understand. The dedicated customs team at AVASK are up to date with all the latest legislation, procedures and requirements. They are able to walk you through the process, removing the complexity and ensuring that you have the correct documentation.

Goods Vehicle Movement System (GVMS)

The UK Government’s Goods Vehicle Movement System (GVMS) will be fully implemented for EU imports into the UK from the start of 2022.

It requires the transport provider to be registered and to input customs entry numbers before goods will be allowed to leave the EU, specifically at non-inventory linked locations such as Dover / Eurotunnel.

Any agricultural food products will need to be pre-notified before customs clearance can be obtained. To ensure your products are pre-notified, you, as an importer or the person responsible for the importing of the goods, must register to comply with the Import of Products, Animals, Food and Feed System (IPAFFS).

If you wish to import any of these categories of goods, then you must register before your goods reach the customs border.

The IPAFFS system is used to notify the UK authorities of the movements of any live animals, animal products, and high risk food and feed of non-animal origin, into the UK from the EU.

Last thing to note…

The ‘importers knowledge’ easement scheme has also come to a close. This was the process that allowed importers to state where goods originated from, in order to gain Duty Free preferences from the EU.

From 2022 onwards, traders must ensure they provide adequate supporting evidence at the time of import, for example a statement or origin receipt.

New procedures and legislation can be complex and convoluted at times. AVASK are here to support your business at every avenue. Our global team of e-commerce accounting and cross-border tax experts provide person-centred solutions tailored to the needs of our clients. Regardless of whether your business is operating in one marketplace, or expanding into new territories, we provide simple solutions that will allow you the time to focus on expanding your business, while we take care of the compliance.

If you have any questions about the new import declaration process, please contact AVASK today. You can also telephone us on: +44 (0)23 8060 0120 or email: customs@avaskgroup.com.

Are you looking for support on your imports and exports? Check out KATA today.