What is postponed VAT accounting and how does it help with imports?

Full answer

When you import goods into the UK, import VAT is normally due. Postponed VAT accounting (PVA) lets VAT-registered businesses defer this so it is declared and recovered on the same VAT Return, rather than paid in cash to clear customs. This removes the cash-flow hit of paying import VAT at the border and waiting to reclaim it later. Worked example: a retailer imports goods with a value for VAT purposes of GBP 20,000. Import VAT at 20% is GBP 4,000. Without PVA the business would pay GBP 4,000 at import and reclaim it on a later return, tying up cash for weeks. With PVA it instead enters GBP 4,000 as output VAT (box for VAT due on imports) and, if the goods are used for taxable supplies, reclaims GBP 4,000 as input VAT on the same return. The net effect is zero VAT cash paid, while the goods clear customs without an upfront payment. To use PVA you give your EORI number and choose PVA on the customs declaration. HMRC then issues a monthly online statement showing the import VAT to declare; you use that statement, not a C79 certificate, to complete your return. Customs Duty (if any) is separate from VAT and is not postponed. Use the VAT calculator to compute 20% import VAT on a consignment's value so you know the figure to enter on both sides of your return. Because customs procedures, EORI requirements and the figures on your monthly statement matter for accuracy, confirm the current process at gov.uk.

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