Postponed VAT Accounting for UK Imports

Learn how postponed VAT accounting works for UK importers, how to declare it, where to find statements, and how to apply it in your VAT return.

Postponed VAT Accounting: How It Works for UK Imports

Postponed VAT Accounting (PVA) is a scheme that allows UK VAT-registered businesses to account for import VAT on their VAT return instead of paying it immediately at the point of entry. Introduced after Brexit, this system helps importers manage cash flow more effectively when bringing goods into the UK from outside the country, including from the EU.

PVA gives businesses a way to defer payment without delaying the release of goods, and it ensures VAT is settled through normal return processes rather than through border agents or immediate cash payments.

What Is Postponed VAT Accounting and How Does It Work?

Postponed VAT Accounting is a method that allows import VAT to be declared and reclaimed on the same VAT return. Instead of paying VAT when goods arrive at the UK border, you postpone the charge and include it as both input VAT and output VAT on your VAT return. This creates a net-zero impact on your payment (provided the goods are for taxable business use), improving your cash flow position.

This approach eliminates the need to pay VAT upfront and wait to recover it later, as was previously required under the old import system.

How Does It Work for Businesses Importing Goods Into the UK?

If your business is VAT registered and imports goods into the UK from outside the UK (including from the EU), you can use PVA to account for VAT when completing your VAT return. You don’t need to apply in advance—just ensure you correctly complete the customs declaration and choose the option to postpone VAT.

The key steps are:

  1. At the time of import, you or your customs agent complete the customs declaration and select "Postponed VAT Accounting".

  2. HMRC generates a monthly Postponed Import VAT Statement (MPIVS), which shows how much VAT has been postponed.

  3. You include these figures on your VAT return, under the correct boxes, usually:

    • Box 1: Output VAT (what you owe)

    • Box 4: Input VAT (what you reclaim)

    • Box 7: Net value of imports

As long as the goods are for business use and you’re eligible to reclaim input VAT, the output and input amounts cancel each other out.

How Do You Declare VAT Postponed?

To declare postponed VAT, include the figures from your monthly import VAT statement in your next VAT return. These values must be entered in:

  • Box 1: Total VAT due on imports accounted for under postponed VAT accounting.

  • Box 4: VAT reclaimed on imports (input VAT).

  • Box 7: Total value of goods imported, excluding VAT.

These figures are not automatically fed into your VAT software—you must manually enter them or use bridging software if you are submitting returns under Making Tax Digital (MTD).

Where Do I Find My Monthly Postponed Import VAT Statement?

Your Monthly Postponed Import VAT Statement (MPIVS) is available in your Government Gateway account under the VAT section. To access it:

  1. Log in to your HMRC Government Gateway account.

  2. Go to “View your VAT account”.

  3. Choose “Postponed import VAT statement”.

  4. Download the statement for the relevant month (they're usually available around the 6th working day of the month).

The statement includes details of all imports declared under PVA in the previous month and is essential for accurate VAT reporting.

Postponed Import VAT Accounting Example

Let’s say your business imports £50,000 worth of goods from the EU in April and chooses to use postponed VAT accounting. VAT at 20% would normally be due immediately, which is £10,000. Instead, using PVA:

  • On your April VAT return, you report:

    • £10,000 in Box 1 (output VAT)

    • £10,000 in Box 4 (input VAT)

    • £50,000 in Box 7 (net import value)

Because the VAT is reclaimed at the same time as it’s declared, there’s no payment required upfront. The transaction effectively balances itself out in your return.

Conclusion

Postponed VAT Accounting is a valuable tool for UK businesses that import goods, helping to ease cash flow by eliminating the need to pay import VAT at the point of entry. By using your monthly postponed import VAT statements and declaring values correctly in your VAT return, you stay compliant while maintaining liquidity. It’s a simple but effective system—once you understand how to apply it, it becomes an integral part of your VAT process.