Postponed VAT accounting: How it works and helps your cash flow

Published Friday 7 November 2025

Table of contents

• What is postponed VAT accounting?
• Who can use the postponed VAT accounting scheme?
• How does PVA work?
• How do I complete my VAT return if I use PVA?
• Getting your postponed VAT statements
• How can postponed VAT accounting help small businesses?
• FAQs on postponed VAT accounting

Key takeaways

• Register with the Customs Declaration Service (CDS) and include your EORI number, UK VAT registration number, and enter 'G' in box 47e on customs declarations to use postponed VAT accounting for imports.

• Download your monthly postponed import VAT statement (MPIVS) by the eighth working day of each month and store copies immediately, as statements are only accessible for six months from publication.

• Complete boxes 1, 4, and 7 on your VAT return using information from your MPIVS to properly account for postponed import VAT due, reclaimed, and total import values.

• Utilise postponed VAT accounting to improve cash flow by avoiding upfront VAT payments at customs and accounting for both VAT due and recovery on the same VAT return.

What is postponed VAT accounting?

Postponed VAT is a system that lets UK businesses declare and recover import VAT on the same VAT return instead of paying upfront at customs.

Since Brexit, companies must pay import VAT on goods worth more than £135 from any country, including the EU. The Government introduced postponed VAT accounting (PVA) to ease this burden on business cash flow.

Key benefits:

• Avoid upfront payment – you do not pay VAT at the UK border
• Reclaim import VAT on the same VAT return
• Clear goods faster at customs – goods are not held while waiting for VAT payment
• Improve cash flow – similar to the previous EU reverse charge mechanism

Who can use the postponed VAT accounting scheme?

Any UK VAT-registered business can use postponed VAT accounting without applying or getting permission, but there are special rules for certain businesses. For instance, those on the Flat Rate Scheme must now account for PVA imports outside of the Flat Rate Scheme turnover.

Eligibility requirements:

• Register for VAT in the UK
• Use goods for business purposes only
• Access the scheme immediately – no application process required

Check the full eligibility requirements for PVA.

Businesses in Northern Ireland are still considered part of the EU VAT area. You do not need to pay import VAT on goods imported from the EU. The reverse charge still applies. You can use postponed VAT accounting for imports from outside the EU.

The postponed VAT accounting scheme is optional. If you prefer, you can pay VAT upfront at the border. If you do this, you need to get monthly C79 (import VAT certificate) reports from HM Revenue and Customs (HMRC).

How does PVA work?

Using postponed VAT accounting requires registration with the Customs Declaration Service (CDS), as the previous CHIEF system is a service is no longer available. You will also need to provide specific information on your customs declaration.

Required setup:

• Register with the Customs Declaration Service before using postponed VAT accounting
• Replace C79 documents with downloadable online statements

Customs declaration requirements:

• Enter your Economic Operators Registration and Identifier (EORI) number
• Enter your UK VAT registration number (VRN)
• Enter 'G' in box 47e for postponed VAT accounting

How do I complete my VAT return if I use PVA?

VAT return completion with postponed VAT accounting requires specific entries and documentation from HMRC.

Process overview:

• Include postponed VAT in the return covering your import date
• Use your monthly postponed import VAT statement (MPIVS)
• Download, verify and store all statements

Getting your monthly postponed import VAT statement (MPIVS):

• Access your statement by the sixth working day of each month
• Check the total import VAT postponed for the previous month
• Download, cross-check with your records and keep copies

Complete three specific VAT return boxes to properly account for your postponed import VAT:

Box 1

Include the VAT due in this period on imports accounted for through postponed VAT accounting. This information will be on your monthly statement.

Box 4

Include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting.

Box 7

Include the total value of all imports of goods in this period, excluding any VAT.

Getting your postponed VAT statements

To use postponed VAT accounting, you need to get your monthly postponed import VAT statement (MPIVS). You can access these statements online through the government's Customs Declaration Service (CDS).

Government guidance says statements are usually available to view by the eighth working day of the month. Download your statement as soon as it is available. You need these statements to complete your VAT return. They are an important part of your business records. You can only access a statement for six months from its publication date, so download and keep copies.

How can postponed VAT accounting help small businesses?

Postponed VAT accounting significantly improves small business cash flow by eliminating upfront VAT payments at customs.

Cash flow benefits

• Avoid upfront VAT payments
• Align VAT payments with your return cycles
• Keep working capital available for your operations

Xero integration advantages

• See your financial position in real time on your dashboard
• Stay compliant with built-in Making Tax Digital features
• Use integrated postponed VAT accounting features

Find out more about how Xero can help you run a healthy business – including getting you MTD ready.

FAQs on postponed VAT accounting

Here are answers to some common questions about postponed VAT accounting.

What is the difference between deferred VAT and postponed VAT?

Deferred VAT was a temporary option after Brexit. Postponed VAT accounting (PVA) is now the permanent system. You account for and recover import VAT on the same VAT return, so you do not pay at the border. This helps your cash flow.

How do I get my postponed VAT accounting statement?

You can get your monthly postponed import VAT statement (MPIVS) from the GOV.UK website. You need to log in to the Customs Declaration Service (CDS) to view and download your statements.

When was postponed VAT accounting introduced?

The postponed VAT accounting scheme was introduced on 1 January 2021. It was designed to help businesses manage the changes to VAT on imports after the UK left the EU.

What happens if I make an error on my PVA VAT return?

If you make a mistake on your VAT return, you can usually correct it on your next return. File on time to avoid penalty points. If you reach a certain threshold, you may get a £200 penalty. The way you correct an error depends on its size and type. Speak with your accountant or bookkeeper to make sure you follow the right process.

Can I switch between postponed VAT accounting and paying at the border?

Yes, the postponed VAT accounting scheme is optional. You can decide whether to use it for each import. If you do not use postponed VAT accounting, you pay import VAT at the border and receive a C79 (import VAT certificate) report from HM Revenue and Customs (HMRC), which you can use to reclaim the VAT later.