Overcharging of VAT through CDS - action to take

Overcharging of VAT through CDS - action to take

9 Jan 2023

You’ll be aware that last Friday (30 December) a system update caused Customs Declaration Service (CDS) to overcharge VAT on certain declarations. The issue was quickly resolved, and HMRC contacted customers who use Duty Deferment Accounts (DDA) to recommend submitting a Current Month Adjustment (CMA) as the quickest route to correcting any overpayments. HMRC have contacted us to express they are sincerely sorry for this error and are grateful to customers for their quick attention to this matter.

Since then, HMRC has been working at pace to process the CMAs we have received. For the customers for whom this was not an option, they have advised the following steps to ensure that this error can be rectified as quickly as possible:

  • If the customer is VAT registered and uses Postponed VAT Accounting (PVA), we have 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.

They reiterated that this has been frustrating for customers and apologise again for the inconvenience this has caused.

HMRC will provide a further update next week, but if in the meantime you are still experiencing problems or feel you need further support with this issue, you can contact HMRC’s Customs and International Trade helpline on 0300 200 3700