What Is Postponed VAT Accounting?
Postponed VAT Accounting (PVA) is a UK government scheme that allows VAT-registered businesses to account for import VAT on their VAT return, rather than paying it upfront when goods arrive at the UK border.
Before PVA was introduced, UK importers had to pay import VAT at the point of importation (or use a duty deferment account to delay payment by a few weeks). This tied up significant cash flow, particularly for businesses with high-volume imports or high-value goods.
Since 1 January 2021, all UK VAT-registered businesses can use PVA for goods imported into the UK from anywhere in the world.
How Does PVA Work?
When you import goods using PVA:
- Your customs declaration includes a code indicating that you are using Postponed VAT Accounting
- No import VAT is collected at the port or airport
- HMRC records the import VAT against your VAT registration number
- You declare the import VAT on your VAT return — both as output tax (Box 1) and input tax (Box 4)
- If you are fully taxable, the two amounts cancel each other out — meaning no net VAT payment
The result is a significant improvement in cash flow for most importers.
Who Can Use PVA?
PVA is available to all UK VAT-registered businesses. You do not need to apply for it separately — you simply indicate on each customs declaration that you want to use PVA.
If you are not VAT registered, you cannot use PVA and must pay import VAT upfront (or via a duty deferment account).
Monthly Postponed Import VAT Statement
HMRC makes a Monthly Postponed Import VAT Statement (MPIVS) available through the Customs Declaration Service. This statement summarises all the import VAT you have deferred under PVA during the month.
You should use the figures from this statement to complete Boxes 1 and 4 on your VAT return. The statement is typically available in the middle of the month following the month of importation.
PVA vs Duty Deferment Accounts
Before PVA, many businesses used a duty deferment account to delay payment of customs duty and import VAT. While duty deferment accounts are still widely used for customs duty, PVA is now the preferred mechanism for managing import VAT.
| Feature | PVA | Duty Deferment | |---|---|---| | Available to | VAT-registered businesses | Any business (with HMRC approval) | | Application needed | No | Yes (requires bank guarantee or approval) | | Payment timing | On VAT return | Monthly (via direct debit) | | Covers | Import VAT | Customs duty + import VAT |
Common PVA Mistakes to Avoid
1. Failing to include the correct PVA code on declarations If your customs agent does not include the correct procedure code and PVA indicator on your import declaration, import VAT will be collected at the border and PVA will not apply.
2. Not reconciling MPIVS figures to your VAT return HMRC expects the figures on your VAT return to match your MPIVS. Discrepancies can trigger HMRC enquiries.
3. Using PVA when not VAT registered Only VAT-registered businesses can use PVA. If you use it without being registered, HMRC may assess you for the full import VAT plus interest and penalties.
Summary
Postponed VAT Accounting is one of the most valuable cash flow tools available to UK importers. If you are VAT registered and importing goods, you should almost certainly be using it. Our team can ensure PVA is correctly applied on all your import declarations and help you reconcile your monthly statements.