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Posted Thu, 18 May 2023 15:36:27 GMT by Ilume
Hello All. I am hoping to clarify a few points on PIVA as it seems not many people are taking advantage of it. I have tried to find some information on the forums here as well. Context: overseas seller, looking to pre-import goods to the UK from a ‘trade agreement’ location. Goods will either go to a fulfillment Centre or an OMP for delivery when a customer (non-business) places an order. I’d like to reduce initial cash outlay and wanted to take advantage of PIVA but concerned based on what appears to be a low take up rate. Option 1: import and pay import tax (no duties) at 20% of cost of goods plus shipping. Reclaim this (full amount?) via the C79 form? Collect VAT at point of sale and remit to HMRC? Option 2: Largely same as 1 but deliver directly to an OMP and pay nothing based on a zero rate sale (is this correct)? Would I then not be allowed to register for VAT and ergo unable to claim back import tax? Option 3: import, apply for CDS, postpone payment of import tax (calculated at 20% of cogs), then declare this on my return alongside VAT collected from sales remitted to HMRC? So sim total paid here would be nil? It is possible I have oversimplified this just as much as I have complicated it. :-( Any input at all would be really appreciated. Even Avalara said they don’t help with PIVA. Thank you.
Posted Fri, 19 May 2023 15:17:41 GMT by carol conway
Not sure why you think PIVA has a low take up, you just tell your broker or customs agent (includes DHL, UPS etc) you want to operate PIVA and as long as goods are from EU they do the rest. Option 3. register for CDS then you can download your PIVA statement from your government gateway account linked to your EORI. Who is going to be the importer into UK? You will need a UK EORI and UK VAT number to be the importer of records, if you are not established in the UK then that may not be possible.
Posted Fri, 19 May 2023 15:35:59 GMT by Customs oldtimer
Hi I don’t know why you think there is a low take up rate for PVA. It is available for all importers who have a UK VAT registration without any prior approval from HRMC so it’s not that complicated. You simply need to tell your customs agent to use it on your behalf. As you are mentioning bulk imports of stock my answers assume you are not using the simplified VAT accounting for consignments below £135 . Option 1: if you are the named importer and use an EORI connected to your VAT number You will pay import VAT. This import will generate a C 79. You need to download the C79 from them CDS portal. Once you have the C79 you reclaim import VAT through your VAT return. Only VAT registered businesses will get a C79. Option 2: assuming you will be the importer then Yes you will pay import VAT at the time of import. You should read the full guidelines on ‘goods in the Uk at point of sale sold by an overseas seas seller through an OMP ‘ . But you may find this extract useful “At the point the goods are sold to the customer, the overseas seller will be deemed to make a zero-rated supply of the goods to the OMP. This is so that the overseas seller will be eligible to register for VAT in the UK and reclaim any import VAT it has incurred in the course of importing the goods, subject to the normal rules for VAT deduction. The overseas seller should show the value of its supplies in box 6 of its VAT return (value of sales) but will not be responsible for declaring VAT on those deemed sales made through the OMP.” Option 3: You need to register on CDS for the purpose of getting financial statements. It is not something you apply for. This is needed whether you pay the import VAT and need to get your C79 or use PVA and need to get your monthly statement. PVA works by postponing import VAT which you effectively pay and reclaim on the same VAT return. Your sales are separate transactions for VAT purposes . Also you comment that you are shipping goods from a ‘trade agreement location’ and expect them to be duty free. To qualify for duty free treatment the goods must originate in that country or territory that is made there and meet the specific conditions of the agreement with the UK. You also need the correct proof or origin to enable your customs agent to claim the reduced duty.
Posted Sat, 20 May 2023 13:02:26 GMT by Ilume
Thank you @carol conway. Of the people I have asked, including Avalara, who you'd expect to be all over everything, few people had experience with it. Might just be this part of the world. You made reference to the EU. I am based out of the EU. As far as I know, PIVA still applies. Am I wrong here? Or are you referring to the DHL, UPS lot? I will be the importer on record, so I can claim back the tax. I am still trying to narrow down a shipper and a customs agent, so depending on what services they offer, TBC. I will have to register for VAT and get the EORI number before putting all this in place. @ Customs oldtimer - Thank you for your response. Yes, shipping individual consignments from Asia is just not practical. So the plan is to ship in bulk to a fulfilment centre. I read the OMP guideline a while back but will refresh. Thank you for sharing that excerpt. Feel much better. Still looking at how much Amazon take as a haircut before deciding. Noted as well on CDS. A part of me is very much looking to outsource the whole thing from shipment to reporting TBH. On Duty free, yes, I am banking on there being no additional duties paid. Using the tariff duty calculator, it says 0%. I was reading the guidance on defining place of manufacture, what counts as duly processed, etc. It's all a bit much. I am not sure what would count as suitable evidence, but 90% of the 'assembly' is in this location. The underlying constituents are from multiple countries. Once I identify a customs agent, I hope they can provide some guidance in what is suitable.
Posted Tue, 23 May 2023 11:30:42 GMT by HMRC Admin 10
When you state PIVA  I'm assuming you mean PVA or Postponed Vat Accounting.
PVA is a system which allows you to help with cash flow on your imports by not paying any VAT when the goods are imported in to the UK.
Instead of paying the import VAT and reclaiming it on a UK VAT return PVA allows you to not pay the VAT but just to record the import on your VAT return.
Please see the guidance below which explains how PIVA works and how you would complete your VAT return.
Check when you can account for import VAT on your VAT Return

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