Postponed VAT Accounting (PVA) Scheme: A Practical UK Guide for Importers

If your UK business imports goods, Postponed VAT Accounting (PVA) can significantly improve cash flow by allowing you to account for import VAT on your VAT Return instead of paying it upfront at the border.

Introduced after Brexit in January 2021, PVA applies to imports from both EU and non-EU countries.

What is Postponed VAT Accounting?

Postponed VAT Accounting allows VAT-registered UK businesses to:

• declare import VAT on their VAT Return
• reclaim the same VAT on the same return (subject to normal recovery rules)
• avoid paying import VAT immediately at customs

Instead of paying VAT when goods arrive in the UK and reclaiming it later, businesses effectively “self-account” for the VAT through their return.

In many cases, this creates a neutral VAT position while preserving working capital.

Why Was PVA Introduced?

Before Brexit, goods arriving from the EU used acquisition VAT accounting, meaning businesses did not usually pay VAT upfront.

After the UK left the EU VAT system, EU imports became standard imports and would normally have triggered import VAT at the border. To prevent major cash-flow problems for UK businesses, HMRC introduced PVA from 1 January 2021.

The main goals were to:

• reduce cash-flow pressure
• simplify import VAT administration
• speed up customs clearance
• support import-heavy businesses

How to use PVA on Import Declarations?

When completing your customs declaration, you must indicate that you want to use postponed VAT accounting.

Usually this is done by:

• selecting postponed VAT accounting on the declaration
• ensuring your VAT number is included correctly

If you use a freight forwarder or customs agent, you should instruct them clearly to apply PVA.

Monthly Postponed VAT Statements

HMRC provides monthly postponed import VAT statements through the Customs Declaration Service (CDS).

These statements show:

• import VAT postponed during the month
• totals to include on your VAT Return

Businesses should retain these statements as VAT evidence.

Is PVA mandatory?

No. PVA is optional.

Businesses can still pay import VAT upfront if they choose. However, most VAT-registered importers use PVA because of the cash-flow benefits

How to Use Postponed VAT Accounting (PVA) in the United Kingdom?

Postponed VAT Accounting (PVA) allows UK VAT-registered businesses to account for import VAT on their VAT Return instead of paying it immediately when goods enter the UK. This helps improve cash flow because you do not need to fund import VAT upfront.

Step 1: You can use PVA if:

• your business is VAT registered in the UK
• you import goods for business use
• you include your VAT registration number on the import declaration

Step2: When goods are imported, the customs declaration must show that you want to use postponed VAT accounting.

You will need:

1. your VAT number
2. your EORI number

Incorrect or missing details are one of the most common reasons businesses are charged import VAT unexpectedly

Step 3: Complete the Import Declaration Correctly

On the customs declaration:

• select postponed VAT accounting
• enter your VAT registration number
• avoid using immediate payment methods for VAT

HMRC notes that once the declaration is submitted, you generally cannot change the VAT accounting method afterward.

Step 4: Import the Goods Without Paying VAT Upfront

Normally, import VAT would be payable immediately when goods enter the UK.

With PVA:

• no upfront import VAT payment is made
• VAT is instead recorded through your VAT Return

Important:

• customs duties may still need to be paid
• PVA only postpones import VAT, not customs duty

Step 5: Download Your Monthly PVA Statement

HMRC creates a monthly Postponed Import VAT Statement (MPIVS) through the Customs Declaration Service (CDS).

The statement shows:

• postponed import VAT totals
• values needed for your VAT Return

You should:

1. log into CDS monthly
2. download the statement
3. save copies for your records

HMRC recommends downloading statements regularly because online access may be time limited.

Step 6: Enter PVA on Your VAT Return

You use the values from your monthly statement when filing VAT.

HMRC guidance says to enter:

In most fully taxable businesses:

• Box 1 and Box 4 offset each other
• the net VAT impact is usually nil