Glossary · UK
What is Postponed VAT Accounting (PVA)?
A scheme available since 1 January 2021 allowing VAT-registered UK importers to account for import VAT on their VAT return instead of paying it at the border.
Full Definition
Postponed VAT Accounting (PVA) was introduced on 1 January 2021 following the UK's departure from the EU single market and customs union. It allows UK VAT-registered businesses to account for import VAT on their VAT return rather than paying it at the point of importation (at the port or airport). Without PVA, import VAT must be paid upfront when goods arrive in the UK, creating a cash flow disadvantage for importers -- particularly those importing large volumes of goods. Under PVA, the importer declares both the output VAT (as if they had charged themselves import VAT) and the corresponding input VAT claim on the same VAT return, meaning the two entries typically cancel each other out and there is no net cash cost, provided the importer is fully taxable. To use PVA, the importer must ensure that PVA is selected on the customs declaration (import entry). HMRC provides a Monthly Postponed Import VAT Statement (MPIVS) to each importer, summarising the import VAT deferred through PVA in each month; this statement is used to populate Box 1 (output tax) and Box 4 (input tax) of the VAT return. PVA is available for goods imported from any country, not just the EU. It is not available for businesses that are not VAT-registered. The use of PVA is optional but is widely used because of the significant cash flow benefit it provides.