PVA Problems

[N/A]

Hi,

I am bit stuck on what to do so hoping someone here might have some advice! This is my situation........

1. I have been importing for a number of years from EU and Worldwide. I have always filed VAT the conventional way and have no intention of changing.

2. I use Quickbooks Desktop. Desktop does not have VAT codes set up for PVA accounting so I am unable to file PVA submissions on my VAT return.

3. DHL decided a while back to enroll everyone to the PVA scheme with an "opt out policy" I did opt out but it took them about 3 or 4 weeks to process the request and in that time I have about 4 DHL customs invoices processed using PVA, so I have not paid VAT to DHL, only the duty / handling charges.

4. I have created an account with HMRC PVA so I can access the monthly statements although the references on the statements make no sense at all in relation to the shipments i`ve been invoiced by DHL.

My question is how should I deal with this on my VAT return? (Deadline 7th May) I have contacted HMRC VAT phone support and got nowhere. I have tried asking DHL to reverse the invoices and issue again with VAT so I can process them how I normally do but they say it cant be done.

At the moment I have about 4 entries on the HMRC PVA statements and not sure what to do about it as Quickbooks desktop is not set up for filing PVA based VAT returns. The closest I have is the old EC sales codes from pre Brexit when dealing with VAT registered EU companies.

In my mind I just think of it as I didnt pay the VAT to DHL as it was not billed to me and I wont be reclaiming the VAT as I have no invoice to show the VAT, so should I just leave it (Although I suspect it is not as simple as this!) Any help would be appreciated as I am starting to stress about the VAT deadline quickly approaching and dont want to end up with a fine for incorrect filing all because DHL decided to enroll me into a scheme that is supposed to be voluntary!!

Thanks in advance

 

[DefinitelyMaybeUK]

In my mind I just think of it as I didnt pay the VAT to DHL as it was not billed to me and I wont be reclaiming the VAT as I have no invoice to show the VAT, so should I just leave it (Although I suspect it is not as simple as this!)

Sorry, can't help with how Quickbooks might handle it, but although the VAT cancels out, HMRC says to enter the figures:
https://www.gov.uk/guidance/complete-your-vat-return-to-account-for-import-vat

To paraphrase, with or without a statement you should still account for the VAT due in your returns (box 1 & 4 so it cancels out and box 7 as usual), by reasonably estimating what is due such that it can adjusted in the future should something better come along

 

[N/A]

Thank you for your reply. I think I might file as normal and complete an adjustment with HMRC to correct after as I dont know how to manually adjust in Quickbooks before filing the VAT return.

I am not an accountant and rely on Quickbooks to do these things for me. I just enter the figures on invoices and reconcile my accounts to make sure everything balances out.

The other problem I have is the HMRC statements dont seem to have any reference numbers that make sense to match it up to the relevant imports so not sure how i`m going to enter the correct figures into box 7 if I dont know what the correct value is!

 

[DefinitelyMaybeUK]

The other problem I have is the HMRC statements dont seem to have any reference numbers that make sense to match it up to the relevant imports so not sure how i`m going to enter the correct figures into box 7 if I dont know what the correct value is!

Yes, the statements aren't great! TBH, assuming the VAT figures are correct(ish), it doesn't matter what they are as they cancel out, so can be used as is. But yes, for peace of mind, you'd want to tie them up. It's not really DHL which is problematic, it seems to be a system thing. We've been fortunate that if you calculate the 20% VAT on the invoice totals (including freight costs) then within a pound or so, the figures match a statement entry - they're dated too, so that must help?

 

[UK Contractor Accountant]

You can create your own PVA 20% & 0% VAT codes in QB Desktop for use in box 1, 4 & 7 of vat return.

Example given for change in vat rate for hospitality & holiday accommodation:

To create a new VAT rate:​

1. In QuickBooks Desktop, select VAT from the top menu.
2. Select Manage VAT.
3. Click Add a new VAT rate and hit Next.
4. Select the appropriate VAT Agency and hit Next.
5. Enter the appropriate name 12.5 HTR, then click Next.
6. Enter 12.5 in the rates field.
7. Select the last option <1, 6> VAT on Sales, Net Sales. Click Next.
8. Enter 12.5 in the rates field.
9. Select the last option <4, 7> VAT on Purchases, Net Purchases. Click Next.
10. Assign a VAT code (for example, HTR), and hit Next.
11. Review the summary and once you're happy with your changes, select Finish.

 

[N/A]

To create a new VAT rate:​

1. In QuickBooks Desktop, select VAT from the top menu.
2. Select Manage VAT.
3. Click Add a new VAT rate and hit Next.
4. Select the appropriate VAT Agency and hit Next.
5. Enter the appropriate name 12.5 HTR, then click Next.
6. Enter 12.5 in the rates field.
7. Select the last option <1, 6> VAT on Sales, Net Sales. Click Next.
8. Enter 12.5 in the rates field.
9. Select the last option <4, 7> VAT on Purchases, Net Purchases. Click Next.
10. Assign a VAT code (for example, HTR), and hit Next.
11. Review the summary and once you're happy with your changes, select Finish.

Only just seen this! Thank you for your reply!

I do not completely understand if this example suits my exact needs and dont know much about the different VAT box codes etc. This is my situation.......

Purchase price ex VAT
DHL invoice shows customs duty / handling charge (Paid to DHL)
VAT processed by PVA at 20% VAT (HMRC PVA Statement)
Sales VAT 20%

Can I use the example above but change the rate of 12.5 to 20%? Will that do what I need it to do?

Also I dont fully understand the difference between PVA 20% & 0% VAT, when would 20% be used and when would 0% be used?

Thanks again!!