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An important PIVA update (Part 1)

I am working with many companies on their VAT submissions and over the last couple of months have encountered a few areas of concern with Postponed Import VAT Accounting (PIVA).

There are many companies that do not know that they are using PIVA

In my experience they are usually SME’s who have only ever traded with EU countries, who are below the Instrastat threshold, predominantly use couriers, do not have their own deferment account & believe the free trade agreement means there is no change to VAT. When they don’t get a VAT bill from the couriers, it’s not a surprise.
‘Helpfully’ couriers have amended their T&C’s to default to using PIVA unless otherwise advised. Many companies use small accountancy firms to file their returns and they seem to be unaware of this reporting requirement.
We advise that companies who haven’t been invoiced import VAT to check via this link to see if they have been using PIVA.
Please note in order to access statements, you will be asked to register with CDS through the government gateway. It’s a quick process and registration with CDS will soon be required anyway, when declarations move from HMRC’s CHIEF system to CDS.

There are companies out there that are using PIVA when importing items for re-work, repair or servicing

This is happening when EU customers send items via a courier to the UK company quoting the GB EORI number of the UK repair company and the courier imports them into Home Use (CPC 40*) and puts G in box 47b to use PIVA to account for the VAT. When filling in the PIVA return the accountant lifts the VAT value from the PIVA statements and enters the value in both boxes 1 and 4 therefore incorrectly reclaiming the import VAT.
We advise that to negate the VAT liability companies should use Inward Processing. For frequent importers (above three times a year) this involves obtaining Inward Processing authorisation from HMRC.
Infrequent can use Inward Processing authorisation by Declaration IPabD You will need a guarantee and to follow the disposal rules submitting a bill of discharge, in order to discharge the VAT and duty liability of the imported goods.

There is more to say on PIVA, I will follow up with further information and advice shortly. If your business is affected by any of these issues, I can help, please email me

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