Apply to use Simplified Import VAT Accounting

Simplified Import VAT Accounting can reduce the amount of the guarantee for a duty deferment account so it only covers duty, not VAT.

What you’ll need

To get simplified accounting approval, your business needs to have a good system of control over its operations and flow of goods. 

You’ll need to have records of your customs controls and a good history of VAT compliance over the last 3 years. 

You will also need to have been registered for VAT for 3 years or more. You can still apply if you have been registered for less time, but you’ll go through more financial and credibility checks.

When you will not be approved for Simplified VAT Accounting

You will not be approved for this way of accounting if you:

• owe money to HMRC
• have been charged with a serious offence by HMRC
• have defaulted on deferment account payments more than once in the last 12 months
• have incurred any default surcharges in the last 12 months
• have transferred the business as a going concern in the last 3 years — unless the transfer happened because of a change in legal status, such as becoming a limited company

Apply for Simplified VAT Accounting

1. Get all of your information together before you start. You will fill this form in online and you cannot save your progress.
2. Fill in Simplified Import VAT Accounting application form.
3. Fill in the questionnaire (ODT, 43.4 KB).
4. Send the form and questionnaire to HMRC.

If you’re acting on behalf of somebody else

You can apply for simplified accounting if you are a:

• customs agent or broker
• freight forwarder 
• fast parcel operator

Who needs to pay the customs debt depends on if you are acting directly or indirectly.

You must meet any liabilities that are set against your deferment accounts, or your simplified accounting approval will be withdrawn.

You need to check who you’re doing business with as simplified accounting may attract fraudsters. You must make reasonable checks to establish the integrity and reliability of your customers.

You can read more about simplified accounting and the type of checks agents need to do — in section 5 of Notice SIVA1.

Where to send the information

You will need to send both the application form and questionnaire to apply. You will need to email your forms to team.siva@hmrc.gov.uk

After you’ve applied

HMRC will usually send you a decision within 120 days, but will send you an acknowledgement if they cannot.

You must maintain a guarantee to cover import, excise duties and import VAT until you’re approved.

If your business has more than one deferment account number you must apply for simplified accounting on each account.

If you do not get approval, you will be told about the review and appeals procedure.

HMRC might need to see your accounts for the last 3 years and ask for a credit check on your business.

Your simplified accounting application will be rejected if your business is in:

• administration
• liquidation
• insolvency
• bankruptcy
• receivership
• other financial difficulty

You can apply for simplified accounting when your business is no longer in financial difficulty as long as you meet the approval conditions.

After your application is approved

1. You’ll get a letter of approval from HMRC if your application is accepted. 
2. You’ll need to fill in a deferment schedule with details of the amount you’ll be deferring each month. If you do not send this form to HMRC within 6 months of your approval letter, your approval will be cancelled and you’ll have to apply again.
3. You can then set up an account to defer duty payments when you import goods.

Source: HM Revenue & Customs

If you need help with your Import VAT, please do not hesitate to get in touch with a member of our staff at TaxLex.