POSTPONED VAT ACCOUNTING (PVA) – What You Need to Know

PVA relates to the accounting of VAT on imports

 Under PVA, import VAT can both be declared and reclaimed on a single VAT return (as opposed to paying VAT when imports enter the UK).

 The cashflow impact of VAT on imports is therefore neutralised because of the PVA scheme. That is, the amount to be paid is exactly offset by the amount to be reclaimed.

How do I register for the PVA scheme?

A registration can be made for the PVA scheme by via the Customs Declaration Service. This can be accessed via one’s HMRC Gateway account.

Instructions on registration can be found on this link.

Monthly PVA statements can be reviewed after an account is setup. Figures given in these statements should be included as adjustments in one’s VAT return each submission.

Amending one’s VAT return for PVA

BOX 1 – Add into box 1 the total VAT postponed on imports through the PVA. This will increase the amount of VAT one owes.

BOX 4 – Insert the same figure as entered in Box 1 into box 4. This will reduce the amount of VAT one owes and act to offset with box 1.

BOX 7 – The value of all imports of goods (excluding VAT) should be entered into this box.

An example

If £500 worth of goods were imported in the UK and the VAT value was £100, a PVA adjustment for £100 would be entered into boxes 1 and 4. An adjustment of £500 would also be entered into box 7.