HMRC have issued a Brexit edition Agent Update for January 2021. We have summarised the key content for you with links to our detailed guidance on the topics covered.

Most of the items have been included in this month's Employer Bulletin (UK Transition Special Edition) and rather than reproduce these we have linked to those updates where appropriate.

Postponed VAT accounting: account for import VAT on the VAT return 

  • Your clients should act now so that they can benefit from Postponed VAT Accounting (PVA) if they are VAT-registered and import goods into:
    • Great Britain (England, Scotland and Wales) from anywhere outside the UK .
    • Northern Ireland from outside the UK and EU. 
  • PVA allows them to declare and recover import VAT on the same VAT return, rather than having to pay it upfront and recover it later.
  • Your clients will not need approval to benefit from PVA, but they will need to access the Customs Declaration Service (CDS) to view and download their monthly statements in PDF format.
    • They need these statements to complete their VAT returns or to send them to whoever completes the VAT return on their behalf.
  • Importers that already have access to CDS will go straight from the start page to their CDS financial dashboard where they can view and download their statements.
    • Businesses without access to CDS will be automatically directed to subscribe to CDS first.
  • Customs Handling of Import and Export Freight (CHIEF) users who subscribe to CDS to access their statements can continue to use CHIEF to make customs declarations.
  • Signing up for CDS is straightforward and takes only a few minutes. Businesses will need details of their:
    • Government Gateway user ID and password.
    • Economic Operator Registration and Identification (EORI) number that starts with GB.
    • Unique Taxpayer Reference (UTR).
    • Address.
    • National Insurance number (if they are an individual or sole trader).
    • The date they started their business.
  • The address on the application must be identical to the address that HMRC hold.
  • When an importer completes the customs declaration from 1 January 2021 on CHIEF or CDS and indicates that they will be accounting for import VAT on their VAT return, that import VAT will be shown on their monthly statement.
  • CHIEF users will need to enter:
    • Their EORI number starting with ‘GB’ which includes their VAT registration number into box 8 (Header Consignee), or if applicable, their VAT registration number in box 44h (Registered Consignee).
    • ‘G’ as the method of payment in box 47e.
  • CDS users need to enter their VAT registration number at header level in data element 3/40. VAT will be recorded against the EORI and will be at declaration level only.
  • The first monthly PVA statements will be available in early February showing the total import VAT postponed in January.
    • Your clients should sign up to CDS now so that they are ready to complete their first VAT return under the new rules.
  • Until the end of June, importers bringing non-controlled goods into Great Britain from the EU must account for import VAT on their VAT return if they choose to either:
    • Delay their customs declaration
    • Use a simplified customs declaration to make a declaration in their own records

Other updates 

See Employer Bulletin: UK Transition Special Edition for: 

  • New rules for trading with Europe.
  • New rules for business travellers.
  • Cash declarations.
  • New rules on social security coordination.

Useful guides on this topic

Importing goods into GB from 1 January 2021
The post Brexit transition period ends on 31 December 2020. HMRC has issued guidance for importing goods. 

Exporting goods from GB from January 2021
The post Brexit transition period ends on 31 December 2020. HMRC has issued guidance for exporting goods. Is your business ready? Have all of the relevant applications been made in order to continue trading smoothly?

Place of supply: Goods
VAT on goods is determined by the Place Of Supply (POS); whether they are UK based supplies, imports, exports, EU dispatches, or EU acquisitions.

External links

Agent Update: January 2021 Brexit edition

HMRC: Get your postponed import VAT statement

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