Does your company import goods from the UK? – Apply a postponed VAT Accounting (PVA) adjustment within Xero

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What you need to know

From 1 January 2021, eligible UK businesses can apply PVA adjustments to their VAT returns. PVA adjustments let you postpone VAT payments on imports instead of having to pay them up front and recover them later. Check if you’re eligible to make PVA adjustments (GOV.UK website).

If you’re on a standard VAT scheme you can apply PVA adjustments directly to your return, without the need to enter a transaction. 

Apply a PVA adjustment to your return

Before you can apply the adjustment to your VAT return in Xero, download your Monthly Postponed Import VAT Statement (MPIVS) (GOV UK website) from HMRC so that you have the most current amounts to refer to.

  1. Initially choose the tax rate ‘Zero Rated Expenses’ when coding up the purchase invoices.
  2. In the Accounting menu, select Reports.
  3. Under Tax, click VAT Return.
  4. Click Apply Postponed VAT Accounting (PVA) adjustments.
  5. Select a MPIVS period, then enter the MPIVS amount for the period.
  6. (Optional) Add Details about the adjustment. These appear in the history and notes and Transactions by VAT box tab of your VAT return in Xero.
  7. To add another adjustment, click Add additional statement. You can add up to 13 adjustments to a VAT return.
  8. Click Save.

For more information of any on any of the above please contact Max Whiteley on m.whiteley@uhy-uk.com or call him on 0161 236 6936.

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