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CDS VAT Overcharge - UPDATE

As you are aware, on the 30th of December a system update on the Customs Declaration Service caused a VAT overcharge issue on a number of declarations. HMRC has provided BIFA with an update on this matter.

To overcome the issue, for those traders who use Duty Deferment Accounts, HMRC suggested submitting a Current Month Adjustment (CMA) to correct any overpayments.

For customers to whom the CMA submission is not a suitable option, HMRC has shared the following steps to take in order to complete the adjustment:

  • If the customer is VAT registered and uses Postponed VAT Accounting (PVA), HMRC has updated guidance to explain how a correction can be made through a PVA statement on the next VAT return. This is available on GOV.UK
  • If the customer is VAT registered and payment was made by Immediate Payment or Cash Account, the simplest way to do this is to recover any overpayment through the next VAT return submitted to HMRC.  
  • If the customer is not VAT registered and either paid by Immediate Payment or Cash Account, or did not submit a CMA, an Import VAT repayment can be made using the CDS form C285 found here.


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