How does the whole PP vat accounting system work?

Post Poned Vat Accounting

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Anyone having similar experience with  fast track couriers?  At at the moment they are withholding my goods because i wont pay the vat and duty on an import (they have the figures all wrong almost double than what it should be - it would appear to me that the customs declaration form has be processed incorrectly, I cant get any further info from them they just tell me its a customs fault and wont provide me with the declarations form. - Anyway me question really is to use the pp vat accounting must I purchase computer software to link up to the Customs Declaration System?, or can I just instruct the courier company to I will declare the vat myself - Im not sure how this part of it works?. Many thanks in anticipation!!

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VAT
By Jason Croke
21st Jan 2021 13:23

You really need to read the "Brace for Brexit" articles here on AccountingWeb, this issue was covered here and includes links to the websites you need https://www.accountingweb.co.uk/tax/hmrc-policy/brace-for-brexit-21-prep...

There is an article coming shortly to AccountingWeb covering this question in further detail, but in short :-

1. You need a GB EORI number (so this only works if you're UK VAT registered and have a GB EORI number).

2. You enrol with the Customs Declaration Service (CDS), this is so you can download a monthly "import statement" and this statement tells you what import VAT goes on your VAT return. You can still ask freight agent to postpone the VAT but you will not be able to complete your VAT return correctly without enrolling for CDS.

3. Crucially. The freight agent MUST be told that the importer (you) is using postponed accounting (enter Code G at q.47e on the C88 SAD document - this is done by the freight agent).

If you just order goods from your usual EU supplier then the supplier will not tell the freight agent any of this, so the freight agent will not use postponed VAT accounting, they'll either just pay the VAT and then recharge you or they'll more likely hold your parcel hostage until the import VAT is paid.

Easy to blame the freight agent but they are not mind readers. Whoever organises the shipping (usually seller, but can be the buyer), they have to instruct the freight agent, so if the seller doesn't give the freight agent your GB EORI number, if the seller doesn't advise customer is postponing the VAT, if the seller doesn't put in a correct commodity code for the goods, then the goods aren't getting into the UK.

Thanks (2)
Replying to Jason Croke:
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By tom123
21st Jan 2021 14:16

Thanks for this clear instruction Jason. I am waiting to see what my regular EU suppliers make of the various missives I have given them..

I am expecting to have to pay VAT at import for the first couple of shipments until they get the idea..

Thanks (1)
Replying to tom123:
VAT
By Jason Croke
21st Jan 2021 14:23

tom123 wrote:

Thanks for this clear instruction Jason. I am waiting to see what my regular EU suppliers make of the various missives I have given them..

I am expecting to have to pay VAT at import for the first couple of shipments until they get the idea..


It seems Brexit has caught out the EU suppliers as much as the UK buyers, EU suppliers perhaps thought Brexit was a distinctly British thing.

Freight agents are probably doing the best they can. As you state, give it a few more weeks and things will start to settle down.

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Replying to Jason Croke:
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By Wilmo3
21st Jan 2021 17:49

Thank you for your rely - Im getting the "jist" of it now, the bit that has thrown me is I have applied to the CDS which was immediately approved, but it asks questions about if my software is compatible to make customs declarations I dont have or want software to connect to CDS - must I have it?, or am I mixing things up?
My freight company tell me today they are not using the postponed vat accounting system - they dont know a lot about it so its deferment or pay upfront, I dont mind paying up and waiting for the C79 -except they have made a mistake on the customs declaration the vat is double and the duty is incorrect - but thats another story!!

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