VAT on imports and postponed VAT accounting

How import VAT changed after Brexit

Goods from the EU and the rest of the world are now imports into Great Britain. Import VAT is due at 20% on most goods. Paying it at the border and reclaiming it a quarter later would lock up cash on every consignment — a serious drag for importers with tight margins.

What postponed VAT accounting does

Postponed VAT accounting (PVA) lets a VAT-registered importer declare and reclaim import VAT on the same VAT return, rather than paying HMRC at the border. For a fully taxable business the two entries cancel out, so there is no cash cost at all — a major working-capital improvement over the old system.

How to use it

You elect to use PVA on your customs declaration, then download a monthly postponed import VAT statement (MPIVS) from HMRC and use its figures on your return. Accurate statements matter — under-declaring import VAT is a common error that triggers assessments.

When it does not fully cancel

If your business is partly exempt or the goods relate to non-business use, you cannot reclaim all the import VAT, so a real cost remains. Duty (separate from VAT) is also still payable at the border. Model the true landed cost before committing to a large import.

Funding stock and duty

Even with PVA removing the VAT cash cost, importers fund stock and duty long before they sell. A working-capital or trade facility bridges that gap.

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