Deferment or postponed VAT accounting is a customs and tax mechanism that allows importers to delay or account for import VAT without paying it immediately at the border. VAT deferment usually lets approved importers pay import VAT later through a deferment account, while postponed VAT accounting allows import VAT to be declared and reclaimed on the VAT return instead of paid upfront. These options can improve cash flow, reduce clearance delays, and simplify import tax management when used correctly. In the UK, Postponed VAT Accounting (PVA) was introduced after Brexit and allows UK VAT-registered importers to account for import VAT on their VAT return instead of paying it at the port. Under a deferment account, the UTB (Uitnodiging Tot Betaling) payment notice is settled on a fixed cycle rather than paid at the port.
- Available to all UK VAT-registered businesses importing goods into the UK
- Import VAT is declared and reclaimed on the same VAT return, resulting in zero net cash impact
- A Monthly Postponed Import VAT Statement must be downloaded from the HMRC portal
- Helps importers avoid significant cash flow impact from VAT payments on each shipment
Related terms: VAT Number, Customs Clearance, Customs Entry, EORI.
