Life outside of the EU is considerably more complicated for businesses in Great Britain who import goods, as import VAT applies to the value of most goods that come in. There are different rules for businesses in Northern Ireland.

There are three options for dealing with this import VAT and the UK buyer needs to communicate clearly to their freight agent which of these will apply:

Freight agent pays the import VAT in order to release the goods from UK Customs. Freight agent recharges these costs to the UK buyer plus an admin fee.

UK buyer has their own VAT deferment account and freight agent uses the buyer's deferment account to release the goods without payment of VAT. HMRC takes payment for the VAT by direct debit around 45 days later.

UK buyer uses postponed import VAT accounting (PIVA) and instructs freight agent that PIVA is to be applied when goods enter the UK. The goods are released with freight agent or buyer paying HMRC and buyer accounts for import VAT as a reverse charge entry on their VAT return.

In all of the above, import duty may also be due on the goods in addition to VAT.

The UK buyer does not have to ask HMRC to use PIVA but it does need to register with HMRC to access the monthly PIVA statements from an online account which it will need to complete its VAT return.

You can access the registration system through this page: www.gov.uk/guidance/get-your-postponed-import-vat-statement and clicking the 'Start Now' button. The business' Government Gateway ID and password will be needed at the next screen. You also need to have your EORI number to hand which is needed for any business imports.

The PIVA statements for the previous calendar month are available to view from the sixth working day of the following month. These statements should be downloaded regularly as they are only held online for six months.

We can help you get your VAT returns right using PIVA but you need to download the statements showing your import VAT.

Last updated: April 29th 2021.