Postponed VAT Accounting (PVA) is one of the most practically valuable tools available to UK importers, yet many businesses — particularly those new to importing — either do not use it or use it incorrectly. For VAT-registered importers bringing goods into the UK, PVA can provide a significant and sustained cash flow benefit by deferring import VAT to the quarterly (or monthly) VAT return rather than requiring payment at the point of importation. What Is Postponed VAT Accounting? Before PVA was introduced at the start of 2021, UK importers faced a cash flow challenge: import VAT was due at the time of importation (or via a duty deferment account), creating a timing mismatch between the VAT cost and the subsequent VAT recovery on the return. For high-volume importers, this could tie up hundreds of thousands of pounds in cash at any given time. PVA resolves this by allowing the importer to account for import VAT on their VAT return — in Box 1 (output tax) and Box 4 (input tax) simultaneously — effectively creating a nil-cost VAT movement for businesses that are fully taxable. The mechanism applies to all goods imported into the UK from any country, including EU member states. It is not restricted to Brexit-related trade. How to Use PVA To use PVA, the importer (or their customs agent acting on their behalf) must enter the importer's EORI number on the customs declaration and select the appropriate Additional Procedure Code (APC) on CDS to indicate that PVA is being used. Importers must then access their Monthly Import VAT Statement through the CDS dashboard. This statement summarises the import VAT deferred in the period and provides the figures needed for the VAT return. Key practical steps: 1. Ensure your EORI is correctly entered on declarations (your agent should confirm this) 2. Register for CDS and ensure your Government Gateway account is linked 3. Access your Monthly Import VAT Statement by the 6th working day of the following month 4. Use the statement figures to complete Boxes 1 and 4 of your VAT return 5. Retain the statements for VAT audit purposes Who Benefits? PVA delivers the greatest benefit to: - High-frequency importers where the aggregate import VAT per quarter is material - Businesses with strong VAT recovery (fully taxable businesses benefit most as they recover 100% of the deferred VAT) - Businesses importing from multiple countries on short payment terms, where the timing mismatch was previously acute Partially exempt businesses need to consider their partial exemption position carefully, as the deferred input tax is subject to the same recovery restriction as other input tax. Common Mistakes with PVA - Failing to register for CDS access, meaning the Monthly Statement cannot be accessed - Agent not entering the correct APC on declarations - Not reconciling declarations to the Monthly Statement before completing the VAT return - Treating the Monthly Statement as an invoice rather than a summary statement - Failing to retain statements as evidence of import VAT for HMRC audit purposes PVA and Duty Deferment PVA is separate from duty deferment. Customs duty (and excise duty where applicable) still needs to be paid either immediately or via a deferment account. PVA only addresses import VAT. Businesses should ensure both mechanisms are correctly set up if they wish to defer all charges at the border. Conclusion For any UK VAT-registered business importing goods regularly, PVA should be the default approach. The cash flow benefit is real, it requires no application (just correct declaration entries), and the administrative process — downloading the Monthly Statement — is straightforward once the CDS access is in place. Businesses that are not currently using PVA should review their customs declarations and agent instructions as a priority.