Postponed VAT Accounting (PVA) – how to avoid paying VAT at the UK border? [2026]

Importing goods into the United Kingdom involves a VAT payment obligation. Normally, VAT must be paid at customs clearance, which can significantly impact the importing company’s cash flow. However, the UK tax system offers a solution: Postponed VAT Accounting (PVA) – VAT deferment procedure.

Thanks to PVA, companies can settle import VAT directly in their tax return instead of paying it at the border. This article explains how PVA works, who can use it, and the formal requirements.

Issue: Cashflow and import VAT

Why is VAT at the border a problem?

Under the standard import procedure to the UK, VAT must be paid at customs clearance. For the importing company, this means:

1. Capital freeze: The company must pay VAT from its own funds before reselling the goods. 2. Delay in deduction: VAT can only be reclaimed in the next tax return (usually the following month or quarter). 3. Cashflow risk: Particularly burdensome for companies with high import volumes or long sales cycles.

Example: The company imports goods worth £100,000. VAT 20% = £20,000. Without PVA, the company must pay £20,000 at the border and wait a month for VAT reclaim. With PVA, VAT is settled directly in the return – no capital freeze.

What is Postponed VAT Accounting (PVA)?

Definition

Postponed VAT Accounting is a procedure introduced by HMRC allowing VAT-registered UK companies defer import VAT payment and settle it directly in the tax return.

Instead of paying VAT at customs clearance, the company: 1. Declares import VAT as VAT due (output tax). 2. At the same time, it deducts it as Input VAT (input tax). 3. If the company is entitled to full deduction, the net effect = £0.

Benefits of PVA

- No payment at the border: No need to freeze capital. - Simplified settlements: All in one VAT declaration. - Faster release of goods: No need to wait for VAT payment confirmation. - Better cash flow: Especially important for companies with high import volumes.

Who can use PVA?

Formal requirements

To use Postponed VAT Accounting, a company must:

1. Be registered for VAT in the UK (must have a GB VAT number). 2. Possess EORI number GB (required for customs clearance in the UK). 3. Declare intention to use PVA in the customs declaration (field "Method of Payment" = code "G").

Important: PVA is available only for companies registered for VAT in the UKCompanies outside the UK (e.g. Polish companies without VAT registration in the UK) cannot use this procedure.

Who CANNOT use PVA?

- Companies not registered for VAT in the UK. - Shipments valued below £135 (subject to different e-commerce VAT rules). - Excise goods (alcohol, tobacco, fuels) – require separate procedures.

How does PVA work in practice?

Step 1: Customs declaration with PVA code

When submitting an import declaration to HMRC, the customs agent (or importer) must: - In the field "Method of Payment" enter code "G" (Postponed VAT Accounting). - Ensure the importer's GB EORI number is correct.

Note: If you use a customs agent, ensure the agent is aware of your intention to use PVA and enters the correct code in the declaration.

Step 2: Release of goods without VAT payment

After submitting a declaration with code "G", the goods are released from customs clearance. without the need to pay VAT. The company receives: - C79 Certificate (electronic document confirming import and VAT amount to be accounted). - MRN number customs declaration.

Step 3: VAT settlement in the declaration

In the next VAT return (MTD - Making Tax Digital) the company: 1. Enters the import VAT amount in the field Box 1 (VAT due). 2. At the same time, enter the same amount in the field Box 4 (VAT input to deduct). 3. If the company is entitled to full deduction, net effect = £0.

Example of settlement: - Import value: £100,000 - VAT 20%: £20,000 - Box 1 (VAT due): +£20,000 - Box 4 (VAT reclaimed): -£20,000 - Net effect: £0 (no payment to HMRC)

Step 4: Document storage

The company must keep records for a minimum of 6 years: - C79 Certificate. - Customs declaration (MRN). - Import invoices. - Proofs of payment for the goods.

PVA and various import scenarios

Scenario 1: Full right to VAT deduction

If the company operates exclusively VAT-taxable activities (e.g. retail, B2B sales), it is entitled to full deduction Import VAT. In this case, PVA generates no costs – VAT is accounted "at zero".

Scenario 2: Partial right to deduction

If a company conducts mixed activities (part taxable, part VAT exempt), it may only deduct proportional part Import VAT. The remainder becomes a cost.

Example: - Import VAT: £20,000 - Deduction proportion: 70% - VAT deductible: £14,000 - Company cost: £6,000

Scenario 3: No right to deduction

If the company exclusively conducts VAT-exempt activities (e.g. financial services, education), cannot deduct Import VAT. In this case, PVA does not benefit cash flow – VAT becomes a cost.

PVA and Polish companies importing to the UK

Can a Polish company use PVA?

Yes, but only if: 1. Will register for VAT in the UK (obtains GB VAT number). 2. Obtains GB EORI number. 3. Will appoint a tax representative in the UK (if not established in the UK).

Important: UK VAT registration involves the obligation to submit VAT returns in the UK (usually monthly or quarterly). It is advisable to consult a tax advisor before making a decision.

Alternative: Using a local importer’s services

If a Polish company does not want to register for VAT in the UK, it can: - Use the services of local importer in the UK (so-called Importer of Record). - The local importer completes customs clearance using their GB EORI and GB VAT numbers. - The local importer uses PVA and then re-invoices the goods to the Polish company.

easyclearance.pl can assist in coordinating this process by connecting the Polish company with our network of partners in the UK.

Frequently Asked Questions (FAQ)

Is PVA mandatory?

No. PVA is an option a company may choose to use but is not obliged to. If a company prefers to pay VAT at the border (e.g. for simplified accounting), it may do so.

Can I use PVA for every import?

Yes, if you meet the requirements (GB VAT registration, GB EORI). You can use PVA with every import declaration.

What happens if I forget to enter the "G" code in the declaration?

If the customs agent does not enter the "G" code, VAT must be paid at the border under the standard procedure. The payment method cannot be changed after submitting the declaration.

Does PVA also apply to customs duty?

No. PVA applies to VAT only. Duty (if applicable) must be paid at customs clearance or secured by a customs guarantee.

How long must I keep C79 documents?

HMRC requires document retention for minimum 6 years from the end of the tax year to which they relate.

How can easyclearance.pl assist?

Coordination with partners in the UK

If you are a Polish company importing to the UK and do not have a GB VAT registration, we can assist with: - Finding a local importer in the UK, who will clear customs under their GB VAT number and use PVA. - Coordination of the process between your company and a UK partner. - Preparation of documentation import in accordance with HMRC requirements.

Support with GB VAT registration

If you plan regular imports to the UK and want to register for VAT in the UK, our team can: - Advise whether GB VAT registration is beneficial for you. - Refer you to trusted tax advisors in the UK. - Assist in preparing registration documentation.

Distinction: easyclearance.pl is a customs agency based in the UK. We directly handle import and export customs clearance in the United Kingdom. If your company needs customs clearance in Poland or another EU country, we coordinate the process through our network of licensed local partners.

Summary

Postponed VAT Accounting (PVA) is an effective tool to optimise cash flow when importing into the United Kingdom. It allows companies registered for VAT in the UK to avoid capital freeze and settle import VAT directly in the tax return.

Key principles: 1. GB VAT registration required and EORI GB number. 2. Code "G" in customs declaration – ensure your customs agent is aware of your intention to use PVA. 3. Settlement in the VAT declaration – VAT due and VAT deductible in the same declaration. 4. Document storage for a minimum of 6 years.

Do you need help with importing to the UK?

If you import goods to the United Kingdom and want to optimise VAT accounting, contact easyclearance.pl. We will assist in coordinating customs clearance and advise on the optimal VAT procedure.

easyclearance.pl is a customs agency based in the United Kingdom. We directly handle clearances in the UK. Customs clearances within the EU are carried out in cooperation with our network of licensed local partners. Contact us →

What the current official guidance means in practice

For operational work, the current procedural rules, declaration fields and relief conditions should be checked directly against the official guidance. For this topic, the core reference points are GOV.UK / HMRC, European Commission.

Official sources

• UK GOV (Import VAT & PVA) — GOV.UK / HMRC, 2026-03-04
• EU Commission (Customs procedures) — European Commission, 2026-03-04
• GOV.UK: tax and duty on goods sent from abroad — GOV.UK / HMRC, 2026-03-04