Who can use Postponed VAT Accounting?

Any VAT-registered UK business can use PVA for imports of goods from outside Great Britain (and outside Northern Ireland for goods from GB). You must be VAT-registered and use your EORI number and VAT registration number in the customs declaration.

What is the customs value for VAT purposes?

The customs value for VAT includes: the transaction value of the goods (what you paid), any customs duty charged, plus freight and insurance costs to the UK port of entry if not already included in the transaction price. This combined figure is the VAT value.

Can I use PVA for all imports?

PVA is available for standard imports of goods by VAT-registered UK businesses. Some special regimes (such as certain customs special procedures) have different rules. PVA is not available for services (which are handled via the reverse charge mechanism instead).

How does PVA compare to paying import VAT upfront?

Without PVA, a VAT-registered importer pays import VAT at the border, then waits up to a quarter before reclaiming it on their VAT return. This creates a cashflow gap. With PVA, the import VAT never actually leaves the business — it is simply declared on the return and recovered simultaneously.

What is the VAT value of imported goods?

The VAT value = customs value + customs duty + any incidental costs (freight, insurance) to the UK border, if not already included in the customs value. Import VAT is then 20% of this VAT value.

Is freight included in the VAT value?

Only if not already included in the customs (transaction) value of the goods. If your goods are purchased on a CIF (Cost, Insurance, Freight) basis, freight is already in the customs value. If purchased on FOB (Free On Board) terms, you must add freight and insurance to calculate the VAT value.

What EORI number do I need?

You need a UK EORI (Economic Operators Registration and Identification) number starting with GB. This is linked to your VAT registration. Businesses can register for an EORI number on the HMRC website, and it is usually issued within 3-5 working days.

What is a duty deferment account?

A duty deferment account (DDA) lets you defer payment of customs duties, import VAT (if not using PVA), and excise duties. You pay monthly in arrears. DDAs can complement PVA or be used as an alternative for VAT, though most importers now prefer PVA for VAT.

Can I use PVA if I am on the Flat Rate Scheme?

Yes, but the treatment is slightly different. Under FRS, you account for import VAT at the standard rate (20%) in Box 1, but reclaim it as input VAT in Box 4 in the usual way — the flat rate does not apply to import VAT under PVA. Check HMRC guidance for the correct FRS treatment.

What information appears on the MPIVS?

The Monthly Postponed Import VAT Statement shows: the date of import, the customs declaration reference, the VAT value, and the import VAT deferred. You use the total import VAT figure for each VAT period to populate your VAT return Boxes 1 and 4.

Is PVA mandatory for UK businesses?

PVA is not mandatory — it is an option available to VAT-registered UK importers. However, because it eliminates the cashflow cost of paying import VAT upfront, most VAT-registered importers opt in. Non-use means paying VAT at the border and waiting to reclaim it.

Does PVA apply to Northern Ireland imports from the EU?

Northern Ireland has special arrangements under the Windsor Framework. Goods moving from the EU to Northern Ireland may be subject to different customs and VAT procedures. PVA may apply to imports from outside the EU into Northern Ireland, but EU-NI movements have separate rules.

Can my freight forwarder or customs agent use PVA on my behalf?

Yes. Your customs agent can complete the import declaration using PVA on your behalf, using your EORI and VAT number. The MPIVS will then show in your Government Gateway account, and you use it to populate your VAT return. You remain responsible for ensuring the return is correct.

What goods are subject to import VAT in the UK?

Most goods imported into Great Britain from outside the UK are subject to import VAT at the same rate as domestic supplies — standard rate (20%), reduced rate (5%), or zero rate (0%). Zero-rated goods (such as most food and children's clothing) do not attract import VAT.

How do I download my MPIVS?

Log in to your HMRC Government Gateway account, go to 'Get your Monthly Postponed Import VAT Statement', and download the PDF for each month. Statements are usually available from the 6th working day of the following month.

What is the net VAT cost for a partly exempt business?

A partly exempt business cannot reclaim all input VAT. If your recovery rate is 60%, you can reclaim 60% of import VAT. The remaining 40% is a business cost. PVA still avoids the upfront payment, but the irrecoverable portion appears as an expense in your accounts.

Can I opt in and out of PVA?

There is no formal ongoing opt-in process — you simply elect to use PVA on each customs declaration. You can use it for some imports and not others. However, consistency is sensible for accounting purposes, as it simplifies reconciliation of your MPIVS against your VAT returns.

Does PVA affect my VAT return completion?

Yes. You must add the total from your MPIVS to Box 1 (output VAT) and to Box 4 (input VAT) on your return. You must also increase Box 7 (total purchases excluding VAT) by the net import value. Failure to include these boxes correctly will cause a VAT accounting error.

How does PVA interact with an EORI-based duty deferment account?

When using PVA, import VAT is deferred via your VAT return and not charged to your duty deferment account. Only customs duty (and excise duty if applicable) runs through the DDA. This reduces the credit requirement on your DDA, potentially allowing a lower guarantee amount.

What are the common mistakes with PVA on VAT returns?

Common mistakes: forgetting to add import VAT to Box 1, reconciling the wrong MPIVS period to the VAT return, using the wrong exchange rate for foreign currency imports, and failing to add the net import value to Box 7. Reconciling your MPIVS monthly against customs entries prevents errors building up.

Postponed VAT Accounting Calculator | Import VAT on UK VAT Return

Q: What if I cannot recover all input VAT?

If you are partly exempt (you make some exempt supplies), your input VAT recovery rate is less than 100%. In this case, PVA still avoids the upfront payment, but you will have a net VAT cost equal to: import VAT × (1 minus your recovery rate). This net cost is calculated in the calculator above.

Import VAT and PVA Calculator

Customs value of goods (£)

UK customs duty rate (%)

Freight / insurance cost (£, if not in customs value)

Input VAT recovery rate (%)

Are you VAT-registered?

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Customs duty—

VAT value (customs value + duty + freight)—

Import VAT (20%)—

Input VAT recovered on VAT return—

Net VAT cost (irrecoverable portion)—

Cashflow benefit of PVA vs upfront payment—

VAT Box 1 entry (output VAT)—

VAT Box 4 entry (input VAT to recover)—

Cashflow benefit estimated assuming a 90-day VAT return period. For guidance only — verify with your customs agent.

What Is Postponed VAT Accounting?

Postponed VAT Accounting (PVA) was introduced for Great Britain imports from 1 January 2021 following the UK's exit from the EU customs union. Before PVA, importers had to pay import VAT at the border (or through their customs agent), and then wait — sometimes for a full VAT quarter — before reclaiming it on their VAT return. For large importers, this created significant working capital costs.

PVA eliminates this cashflow gap. When you use PVA, the import VAT is declared on your VAT return in Box 1 (as output VAT) and simultaneously reclaimed in Box 4 (as input VAT). For a fully taxable business recovering 100% of input VAT, the two entries cancel and there is zero net cashflow impact.

PVA is available to all VAT-registered UK importers. HMRC issues a Monthly Postponed Import VAT Statement (MPIVS) showing the import VAT deferred — use this to complete your VAT return each period.

How Import VAT Is Calculated

The VAT value for import purposes is the customs value of the goods plus any customs duty charged, plus freight and insurance to the UK border if not already included in the customs value. Import VAT is 20% of this combined figure. Customs duty is not reclaimable — it is a direct cost of importing. Only the import VAT is recoverable through PVA.

Partly Exempt Businesses

If your business makes both taxable and exempt supplies, you may only recover a proportion of input VAT. In this case, PVA still avoids the upfront border payment, but the irrecoverable portion of import VAT becomes a genuine cost. The calculator above shows this net cost based on your recovery rate.

Frequently Asked Questions

Postponed VAT Accounting (PVA) lets VAT-registered UK businesses importing goods declare import VAT on their VAT return rather than paying it immediately at the border. The import VAT is declared in Box 1 (as output VAT) and simultaneously in Box 4 (as input VAT) of the VAT return, so fully VAT-recoverable businesses have zero net cashflow impact.

Any VAT-registered UK business can use PVA for imports of goods from outside Great Britain. You must be VAT-registered and use your EORI number and VAT registration number in the customs declaration.

Import VAT is calculated on the customs value plus any customs duty plus freight and insurance costs (if not already included in the customs value). This total is called the VAT value, and import VAT = VAT value × 20%.

Under PVA, you add import VAT to Box 1 (VAT due on sales and other outputs) and also add it to Box 4 (VAT reclaimed on purchases). If you recover 100% of input VAT, the entries cancel out and there is no net VAT cost. Box 7 (net value of purchases) should also be increased by the VAT-exclusive import value.

Without PVA, import VAT must be paid to HMRC at the border (or via a customs agent). You then wait for your next VAT return to reclaim it — a gap typically of weeks or months. With PVA, both the output and input VAT appear on the same return simultaneously, so a fully VAT-registered business never actually pays import VAT upfront.

If you are partly exempt, your input VAT recovery rate is less than 100%. PVA still avoids the upfront payment, but you will have a net VAT cost equal to import VAT multiplied by (1 minus your recovery rate).

HMRC provides a Monthly Postponed Import VAT Statement (MPIVS) showing the import VAT you have deferred under PVA each month. You use this figure to complete Boxes 1 and 4 of your VAT return. Statements are available via your Government Gateway Customs Declaration Service account.

Customs duty is still paid at the border (or shortly after, via a duty deferment account). PVA only postpones the VAT element. Customs duty is not reclaimable on a VAT return — it is a cost of importing.

Customs duty is a trade tariff charged on the value of imported goods, set by the UK Global Tariff. It is a cost that cannot be reclaimed. Import VAT is the standard 20% VAT charge on the full customs value, and is reclaimable by VAT-registered businesses. PVA postpones the VAT only, not the duty.

No. PVA is only available to VAT-registered UK businesses. Non-registered businesses and consumers must pay import VAT at the border and cannot reclaim it.

You or your customs agent must include your EORI number and VAT registration number in the customs import declaration and elect to use PVA. The customs declaration system records the postponed VAT and HMRC generates your monthly MPIVS statement automatically.

Keep the customs import entry (C88/E2), your MPIVS from HMRC, supplier invoices, proof of freight costs if applicable, and the VAT return entries. These records must be kept for at least 6 years and produced to HMRC on request.