Chris Leslie – 2014 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Chris Leslie on 2014-04-25.

To ask Mr Chancellor of the Exchequer, if he will take steps to improve support for small and medium-sized enterprises which are in need of short-term assistance and flexibility through improved partnership working between the HM Revenue and Custom’s (HMRC) simplified import VAT accounting duty deferment team and the HMRC debt management and time-to-pay teams; and if he will make a statement.

Mr David Gauke

The Simplified Import VAT Accounting (SIVA) scheme is a trade facilitation measure that reduces compliance costs for legitimate traders through the removal of the requirement to provide a guarantee to secure import VAT paid through the duty deferment scheme.

The risk to the tax revenue by traders operating SIVA is potentially very large as the period between the tax due being deferred and being collected by HMRC may result in a failure to pay. The setting of the SIVA approval criteria has to strike a balance between ensuring the trade receive the maximum benefit from the scheme, while at the same time protecting the revenue.

Businesses have to demonstrate on-going compliance with the SIVA requirements. The SIVA team monitor this through internal systems, including any outstanding debts or Time-to Pay agreements requested. When they identify a business experiencing difficulties, they advise them of the potential impact on their SIVA approval. Warning letters are issued by the team to businesses who fail to comply and only if there is evidence of continued non-compliance is the approval removed.

The current procedures provide an appropriate balance between trade faciliation and protection of the revenue.