Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the impact of the length time taken to transfer data in respect of the Postponed VAT Accounting system on small businesses.

Postponed VAT Accounting (PVA) was introduced on 1 January 2021 for goods imported from anywhere in the world. This means UK VAT registered businesses are now able to simultaneously account for and recover import VAT on the same VAT return, subject to the normal rules on input tax deduction, rather than paying import VAT at or soon after the time that the goods arrive at the UK border. This is similar to the way that VAT on goods acquired from the EU was accounted for prior to 1 January 2021.

Businesses that opt to use PVA on their customs declaration will be provided with a monthly import VAT statement no later than the sixth working day of the month following the import. Businesses that use staged customs controls, for which PVA is mandatory, will be provided with an import VAT statement no later than the sixth working day following submission of their supplementary declaration. Businesses access this statement through the financial dashboard of the Customs Declaration Service and will use it to both account for the import VAT in Box 1 of their VAT return and recovery of import VAT in Box 4.

Comprehensive guidance has been published and businesses should find PVA to be a cost effective and straightforward method of accounting for import VAT.