How accounting apps are dealing with the changes
HMRC have updated (11 February) their guidance on how and when UK VAT-registered businesses should account for import VAT on their VAT returns.
We have also published various articles with information on the post Brexit VAT changes and postponed VAT accounting and related topics.
Here I provide a recap on postponed VAT accounting (PVA) with more details on how to get the statement and how various accounting software applications are dealing with this.
HMRC
As a quick reminder, postponed VAT accounting gives an option to account for, and recover, VAT on imported goods on the same VAT return, rather than paying for the import VAT upfront.
You can choose to use Postponed VAT accounting (PVA) if you fulfil the following criteria:
- you have a UK business that is registered for VAT
- you import business goods into the UK with a value in excess of £135 (exclusive of VAT)
- you elect to use PVA on the customs declaration
- you use your own VAT registration and EORI numbers on the customs declaration
To download the postponed import VAT monthly statement, you will need a Government Gateway user ID and password which is linked to your EORI number.
You have to use the following link which brings you straight into the statement page https://www.gov.uk/guidance/get-your-postponed-import-vat-statement
The process is quite straightforward, providing you use the correct link and the login details.
It is important to remember that the statements can only be accessed for 6 months from the date on which they are published.
For more information on how and when UK VAT-registered businesses should account for import VAT go to https://www.gov.uk/guidance/check-when-you-can-account-for-import-vat-on-your-vat-return
XERO
Xero has developed a PVA update which will be released well before the next VAT deadline of 7th March. The new functionality will be automatically available to Xero customers.
When creating a VAT Return in Xero
- You will have to select the ‘PVA option’ button and add the amount from your Monthly Postponed Import VAT Statement (MPIVS), available in your HMRC portal.
- Xero will populate your VAT return automatically
SAGE
Sage has created a quick guide of the most common scenarios for tax codes before and after 1 January 2021. This is for Sage cloud Accounts version 27.1 and above.
Our specialist Brexit Advisory Team are publishing updates and guidance for businesses adn individuals on changes following Brexit. If you have any questions or need assistance with this or any Brexit related matter please contact us.
Before Brexit
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After Brexit
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After Brexit
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England, Wales and Scotland
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Northern Ireland
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T0 (box 6), T1 (boxes 1 and 6) or T2 (box 6)Sale of goods – no VAT registration provided |
T0 (box 6) – Zero rates transactions – assuming sale is zero rated |
No Change: T0 (box 6), T1 (Boxes 1 and 6) or T2 (Box 6). |
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T1 (boxes 1 and 6)Sale of services – no VAT registration provided |
No change: T1 (boxes 1 and 6) – Standard rated transactions |
No change: T1 (boxes 1 and 6) – Standard rated transactions |
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T4 (boxes 6 and 8)Sales of goods to VAT registered customers in EC |
T0 (box 6) – Zero rates transactions – assuming sale is zero rated |
No change: T4 (boxes 6 and 8) – Sales of goods to VAT registered customers in EC |
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T7 (boxes 7 and 9)Zero rated purchases of goods from suppliers in EC |
T17 (boxes 1, 4 and 7) – Import of goods – Under import reverse charge threshold of £135
T18 (boxes 1, 4 and 7) – Import of goods – Postponed VAT accounting
T19 (boxes 4 and 7) – Import of goods – VAT not Postponed VAT Accounting |
No change: T7 (boxes 7 and 9) – Zero rated purchases of goods from suppliers in EC |
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T8 (boxes 2, 4, 7 and 9)Standard rated purchases of goods from suppliers in EC |
T17 (boxes 1, 4 and 7) – Import of goods – Under import reverse charge threshold of £135
T18 (boxes 1, 4 and 7) – Import of goods – Postponed VAT Accounting
T19 (boxes 4 and 7) – Import of goods – VAT not Postponed VAT Accounting |
No change: T8 (boxes 2, 4, 7 and 9) – Standard rated purchases of goods from suppliers in EC |
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T22 (box 6)Sales of services to VAT registered customers in EC |
T0 (box 6) – Zero rates transactions |
T0 (box 6) – Zero rates transactions |
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T23 (boxes 6 and 7)Purchase of services – no VAT |
T16 (box 7) – Purchase of services from ROW – No VAT |
T16 (box 7) – Purchase of services from ROW – No VAT |
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T24 (boxes 1, 4, 6 and 7)Purchase of services – reverse charge |
T15 (boxes 1, 4, 6 and 7) – Purchase of services from ROW – Reverse charge |
T15 (boxes 1, 4, 6 and 7) – Purchase of services from ROW – Reverse charge |