IMPS02360 | Background information and policy objectives: practical implications of using PVA

Where PVA is legitimately notified on a customs declaration the import VAT to be accounted for is no longer treated ‘as if’ it were a duty of customs but falls within VAT legislation. Corrections and errors should be accounted on the relevant return and, where necessary, any additional VAT identified should be assessed using VAT mechanisms

For fully taxable importers, PVA VAT accounting will usually result in a nil net tax liability but it is important that even where this is the case the VAT is included on the VAT return.

Full details on how importers are expected to do this is outlined in Complete your VAT Return to account for import VAT - GOV.UK

However import VAT is accounted for, partially exempt importers are expected to restrict their import VAT recovery in line with their Partial Exemption calculation. VAT Partial Exemption Guidance - HMRC internal manual - GOV.UK