Xero Update for Postponed VAT Accounting
Can Postponed VAT accounting ease cashflow impacts post-Brexit? Find out more.
We know a lot of our clients are struggling at the moment to get their heads around the new VAT rules with the EU following Brexit. One of the big impacts is that if you import goods from EU countries you will now have to pay import duty at the point the goods enter the country. If you are a VAT registered business, you can recover this import VAT when you file a VAT return.
However, some concern has been raised about the cashflow impact of having to wait until the next VAT return is filed to reclaim these funds. Therefore, the government has introduced Postponed VAT Accounting (PVA) which will enable companies registered for this service, to avoid paying the import VAT at the point the goods enter the country and instead they will just need to declare it on their VAT returns.
Which businesses can use PVA?
You can choose to use PVA if you:
- have a UK business that is registered for VAT
- import business goods to the UK valued at more than £135 (exclusive of VAT)
- elect to use PVA on the customs declaration
- use your own VAT registration and EORI numbers on the customs declaration
How to use PVA
For clients using Xero software, Xero has announced that they are shortly releasing an update to their VAT system to deal with PVA.
If you think PVA is right for your business, you will be able to download a Monthly Postponed Import VAT statement from HMRC which will then need to be entered into Xero as part of your VAT return process.
If this affects you and you would like more information on this, please visit the latest Xero blog.
Count on Cardens
You can also contact Cardens for any questions you have on Xero or on changes to the VAT system following Brexit.
As a Xero Platinum Partner, you will be in safe hands knowing that we have the experience and knowledge to help you get the most from Xero.
If you would like to know more, please read our brochure or contact us for more information.