Under postponed VAT accounting (PVA) a VAT-registered importer does not pay import VAT at the border. Instead it declares the VAT as output tax and reclaims it as input tax on the same VAT return. The figure for both comes from the monthly postponed import VAT statement (MPIVS) in the Customs Declaration Service. Without a reconciled statement, the return is a guess.
Download every month, without fail
Statements are published in the month after the imports and are available online for six months only. If they are not downloaded in time they cannot be retrieved as a statement, so build the download into the month-end routine and save the PDF with the VAT records. An agent or freight forwarder cannot download it for you unless they have been given access.
Posting the statement
For a month in which the statement shows £9,400 of postponed import VAT on goods with a customs value of £47,000:
| VAT return box | Entry |
|---|---|
| Box 1 (output VAT) | include £9,400 |
| Box 4 (input VAT) | include £9,400, if the goods are for fully taxable use |
| Box 7 (purchases) | include £47,000, the value of the imports |
In the ledger the two VAT entries sit in the VAT control account and cancel out, so the net effect on the bill is nil for a fully taxable business. The goods themselves are posted from the supplier’s invoice; their cost does not include VAT.
Matching the statement to the books
Each line on the statement shows a declaration reference (MRN), date and VAT amount. Match them to:
- the customs entries from the forwarder or broker;
- the supplier invoices or purchase orders for the goods;
- the duty and fee invoices from the forwarder.
Typical differences and what they mean:
| Difference | Usual cause | Action |
|---|---|---|
| Import on the statement, no purchase record | goods invoice not yet posted | post the invoice; include the VAT from the statement anyway |
| Purchase recorded, no statement line | import VAT paid at the border instead (C79 route) or declared under another EORI | check the customs entry and the forwarder’s instructions |
| Amounts differ | customs value includes freight and duty; supplier invoice does not | use the statement figure for VAT |
The statement, not the purchase invoice, is the figure for the return. Adjustments by HMRC to a declaration appear on later statements.
Partly exempt businesses
The output VAT on box 1 is always the full statement amount. The input VAT on box 4 follows the business’s partial exemption calculation, so a partly exempt importer will not recover all of it.
Evidence to keep
The PDF statements, the forwarder’s customs entries and the instruction that PVA should be used. Keep them for at least six years with the other VAT records.
For the overall import rules see VAT on imports and exports, and for the ledger accounts, VAT control accounts.