Postponed VAT Accounting for UK Imports: What It Is and How to Use It

What Is Postponed VAT Accounting?

Postponed VAT Accounting (PVA) is a mechanism that allows VAT-registered UK businesses to account for import VAT on their VAT return, rather than paying it upfront at the time of importation.

Before PVA, businesses had to pay import VAT when goods entered the UK and then reclaim it on their subsequent VAT return — creating a potentially significant cash flow delay.

With PVA, import VAT is simply recorded on the same VAT return as a debit and credit (for businesses with full VAT recovery), resulting in zero net cash flow impact.

Who Can Use PVA?

PVA is available to any VAT-registered business importing goods into the UK. It is optional — you choose whether to use it on each individual declaration.

You cannot use PVA if:

• You are not VAT-registered in the UK
• Your goods are imported under a simplified customs procedure that does not support PVA
• The goods are subject to specific customs duty suspension schemes that have their own VAT rules

How to Request PVA on a Declaration

To use PVA on a CDS import declaration, you or your customs agent must enter the correct indicator on the declaration. Specifically:

• In Data Element 2/6, the method of payment code E must be entered
• Your UK VAT registration number must be provided

Once approved, HMRC will not collect import VAT at the point of importation. Instead, a statement of import VAT will be made available monthly via your HMRC online account.

The Monthly PVA Statement

HMRC provides a monthly statement of all import VAT accounted for under PVA. This statement is available in your HMRC online account by the 6th working day of the following month.

You must use the figures from this statement when completing your VAT return. The import VAT is entered as:

• Box 1: Output tax (what you "owe")
• Box 4: Input tax (what you can reclaim)

For fully VAT-recoverable businesses, these figures cancel each other out.

Common Mistakes with PVA

• Not downloading the monthly statement: HMRC only keeps statements for 5 years, so download and archive them.
• Incorrect VAT return entries: Always use the PVA statement figures, not your own estimates.
• Using PVA when not VAT-registered: Only VAT-registered businesses can use PVA.

Case Study

A UK clothing retailer importing goods from Vietnam was previously paying £15,000 in import VAT every month at the port of entry. By switching to PVA, they eliminated this monthly cash flow burden entirely — freeing up working capital without any change to their ultimate VAT liability.

Need Help with Import VAT?

Our team advises on import VAT treatment as part of every declaration we process. Contact us to discuss how PVA could benefit your business.