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Postponed VAT accounting lets a VAT-registered business account for import VAT on its VAT return instead of paying it when goods arrive in the UK. You declare the import VAT as output tax and reclaim it as input tax on the same return, so for most businesses the net cost is nil and no cash leaves the business at the border. You do not need HMRC approval to use it, but you must choose it on each customs declaration.
Since Brexit, goods from the EU are imports just like goods from China or the US. This guide explains how postponed VAT accounting works, the monthly statements, EORI numbers, customs duty, low-value parcels and a worked VAT return example for a Bolton business.
What is postponed VAT accounting?
When goods come into Great Britain from outside the UK, import VAT is due, usually at 20%. Before 2021, most businesses paid it at the border, or through a duty deferment account, and then waited to reclaim it on their next VAT return.
Postponed VAT accounting (PVA) removes that cash flow gap. The VAT is recorded against your EORI number, appears on a monthly online statement, and you account for it on your VAT return. If you can reclaim all your input VAT, the two entries cancel out.
| Paying import VAT at the border | Postponed VAT accounting | |
|---|---|---|
| When VAT is paid | Before goods are released | On your VAT return |
| Cash flow | VAT tied up until you reclaim it | No upfront VAT payment |
| Evidence for reclaim | Import VAT certificate (C79) | Monthly postponed import VAT statement |
| Approval needed | No | No |
| Covers customs duty | No | No |
Who can use postponed VAT accounting?
You can use it if:
- you are registered for VAT in the UK,
- you are importing goods for use in your business, and
- you have the right to dispose of the goods, usually because you own them.
It applies to goods brought into Great Britain from anywhere outside the UK, and into Northern Ireland from outside the UK and EU. If a customs agent or courier makes the declaration for you, you must tell them in writing, before they submit it, that you want to use PVA. The choice cannot be changed once the declaration is made.
If you are not yet registered, our guide to VAT registration explains the £90,000 threshold and voluntary registration.
You need an EORI number
You need an EORI (Economic Operators Registration and Identification) number to move goods into or out of Great Britain for business. Import VAT under PVA is recorded against your EORI number, so give it to your customs agent or supplier for every shipment. Your VAT registration number also goes on the declaration.
Without the right EORI number on the declaration, your import VAT will not appear on your statement, and your agent may pay the VAT at the border instead.
Postponed VAT accounting statements
HMRC publishes a monthly postponed import VAT statement, usually by the 10th working day of the following month. You access it through the Customs Declaration Service, using the Government Gateway details for your VAT registration.
Key points:
- Statements stay online for 6 months, so download every one and keep it with your VAT records.
- Part 1 shows the total import VAT for the month; Part 2 lists each import entry.
- The statement is your evidence for reclaiming the import VAT.
- If a statement is not available when you file, you can estimate the figure and adjust it on a later return when the statement arrives.
- Check each statement for duplicate entries and correct them.
Customs duty is separate
Postponed VAT accounting only covers VAT. Customs duty must still be paid when goods are imported, or through a duty deferment account if you import regularly. The duty rate depends on the commodity code and the country of origin, and some goods from countries with a UK trade agreement are duty-free if they meet the rules of origin.
The VAT value of imported goods is the customs value plus customs duty, other import charges and transport and insurance costs to the first UK destination. So duty increases the import VAT due.
Low-value imports of £135 or less
Different rules apply to consignments worth £135 or less. For most non-excise goods in this range, the seller or online marketplace charges UK VAT at the point of sale, rather than VAT being collected at the border. Postponed VAT accounting does not apply to these, except for excise goods. Currently no customs duty is charged on non-excise goods of £135 or less, but the government has announced that this relief will be removed from October 2028.
If you sell online and buy stock from overseas marketplaces, our guide to tax for online sellers covers the wider picture.
Worked example: postponed VAT accounting on a VAT return
Mia runs an online homeware business in Bolton and imports a shipment of goods from China in the July to September 2026 VAT quarter.
| Import calculation | Amount |
|---|---|
| Customs value (goods plus freight and insurance to the UK) | £20,000 |
| Customs duty (illustrative rate of 4%) | £800 |
| VAT value | £20,800 |
| Import VAT at 20% | £4,160 |
Mia pays the £800 duty to release the goods but uses postponed VAT accounting for the £4,160. In the same quarter she has UK sales of £60,000 plus VAT and UK purchases of £8,000 plus VAT.
| VAT return box | Without imports | With postponed import VAT |
|---|---|---|
| Box 1: VAT due on sales | £12,000 | £16,160 |
| Box 4: VAT reclaimed on purchases | £1,600 | £5,760 |
| Box 5: Net VAT to pay | £10,400 | £10,400 |
| Box 6: Total sales excluding VAT | £60,000 | £60,000 |
| Box 7: Total purchases excluding VAT | £8,000 | £28,800 |
The import VAT goes in Box 1 and Box 4, so Mia’s VAT bill is unchanged. Without postponed VAT accounting she would have paid £4,160 at the border and waited until her VAT return to get it back.
If Mia used the VAT Flat Rate Scheme, she would work out her flat rate figure first, then add the import VAT to Box 1. The import VAT is kept out of her flat rate turnover. Partly exempt businesses can only reclaim the proportion of import VAT that relates to taxable supplies. You can check VAT figures quickly with our VAT calculator.
Common import VAT mistakes
- Forgetting to tell the courier or agent to use PVA, so they pay the VAT and add a fee.
- Not downloading statements before they disappear after six months.
- Reclaiming import VAT shown on a courier’s invoice, when the goods were actually accounted for under PVA, or the other way round.
- Entering import VAT in Box 4 but not in Box 1.
- Putting the wrong EORI number on the declaration, so the VAT goes on someone else’s statement.
Frequently asked questions
Do I need to apply for postponed VAT accounting?
No. Any UK VAT-registered business can use postponed VAT accounting without approval. You or your agent simply choose it on the customs declaration.
Is postponed VAT accounting compulsory?
No. You can choose to pay import VAT at the border, or through a duty deferment account, instead. Most businesses use PVA because it avoids paying VAT upfront.
Where do I find my postponed import VAT statement?
Statements are on the Customs Declaration Service, usually by the 10th working day of the following month. Download them, as they are only available online for six months.
Does postponed VAT accounting apply to goods from the EU?
Yes. Goods brought into Great Britain from the EU are imports, so PVA can be used. Northern Ireland has different rules for goods moving from the EU.
Can I use postponed VAT accounting if I am not VAT registered?
No. You must be registered for VAT in the UK. Businesses that are not registered pay import VAT at the border and cannot reclaim it.
Get help with import VAT
Cangaf’s ACCA-qualified team helps Bolton importers set up postponed VAT accounting, reconcile monthly statements and file accurate VAT returns, so you never pay import VAT you do not need to. Request a fixed-fee quote today.
Official guidance: Check when you can account for import VAT on your VAT Return, Get your postponed import VAT statement, Complete your VAT Return to account for import VAT and Get an EORI number.
