Our last article outlined how you can use the Import VAT and Duty Deferral scheme to make it easier to pay your VAT when importing after Brexit. However, one of the limitations of the scheme was that you needed a guarantee from your bank or building society in order to gain access to the scheme. A Simplified Import VAT Accounting account (SIVA) will allow the holder to gain access to the Import VAT and Duty Deferral scheme without a guarantee for your VAT. Read on to find out how a SIVA account works and how to get one.
What Is SIVA?
Essentially, SIVA enables a company or agent to operate a VAT and duty deferment account without a guarantee for the VAT element, therefore reducing the compliance cost to the business. The new Import VAT and Duty Deferral scheme is essentially an extension of the SIVA scheme that has made it more useful for life after Brexit.
The main difference between the two schemes is that SIVA requires you to have been a registered importer with a clean VAT history for the last 3 years in most cases, whereas new importers can use the deferral scheme but their guarantees will be required to be much higher.
The HMRC have now amended the SIVA scheme to allow for importers without 3 years compliance history to apply, but they cannot be new importers and they will have to undergo considerably more financial and credibility checks.
The new scheme also allows you to defer duty payments, whereas the SIVA scheme only allows the deferral of VAT payments.
It is worth noting that you can apply for both of these schemes at the same time in order to use them in combination with each other.
How To Apply
First things first, to get approval for a SIVA account, your business needs to have a good system of control over its operations and flow of goods. Further, as previously stated, it is ideal that you would have been registered for VAT for 3 years or more.
It is also worth pointing out that you can NOT apply for SIVA 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.
If none of the above criteria applies to you, you should feel free to apply. You will need to complete and send the simplified accounting application form and questionnaire to the HMRC.
Due to the pandemic, the HMRC have communicated that applications should be made by email and a supporting copy sent by post until further notice.
Once you’ve sent your application, be warned that the HMRC may need to see your accounts for the last three years and may ask for a credit check on your business. In order to ensure the process is completed as quickly as possible, it is worth getting this information to hand as soon as you send off your application.
Once this is done, if you are accepted (you will be notified by letter if you are) then all that is left to do is 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.
Need Help Deferring VAT With SIVA?
Here at J & P Accountants, we understand that the prospect of preparing your business for the application process and then contacting the HMRC can be daunting; but that’s where we come in.
If you are a business who participates in cross border e-commerce, we would be more than happy to help you register for the VAT deferral scheme, file your VAT returns, and help you comply with VAT in case your account faces any issues. At J&P, helping your business is our passion, and we understand that companies across the UK are at risk now more than ever. We are here to support you through the Coronavirus crisis and Brexit, so please do not hesitate to give us a call on 0161 637 1080 or send an e-mail to enquiries@jpaccountant.com.
