Postponed VAT accounting lets a UK VAT registered business declare import VAT on its VAT return instead of paying it at the border, and reclaim it as input tax on the same return under the normal rules. You choose it on each import declaration, HMRC records the VAT against your EORI number, and you download a monthly postponed import VAT statement from the Customs Declaration Service to support the figures in boxes 1, 4 and 7.

What is postponed VAT accounting and who can use it?

HMRC’s guidance describes it as declaring and recovering import VAT on the same VAT return, rather than paying it upfront when goods are imported and recovering it later. Notice 700, paragraph 5.2, confirms it has been available from 1 January 2021 for goods imported into:

  • Great Britain from anywhere outside the UK
  • Northern Ireland from outside the UK and the EU

You must be registered for VAT in the UK. No approval is needed. HMRC’s guidance on when you can use it says the goods must be for use in your business, you must have the right to dispose of them (usually as owner), and you must include your VAT registration number on the import declaration. Goods for mixed business and non business use, or goods whose use is not yet known, can still be included. A business that is not established in the UK can use it, but must have someone deal with customs on its behalf, select postponed accounting on the declaration and enter the business as consignee.

Where it cannot be used

  • Goods in consignments over £135 delivered by Royal Mail Group postal services, although Royal Mail offers postponed accounting for its commercial, non postal services if asked.
  • Commercial goods in baggage where you choose the simple online declaration.
  • Consignments of £135 or less, which follow separate rules (excise goods excepted).

It can be used when goods are released from customs warehousing, inward processing, temporary admission, end use, outward processing and duty suspension, and when excise goods are released for home consumption.

How do I choose it on the import declaration?

You select postponed accounting on the declaration, entering your VAT registration number at header level in Data Element 3/40, and you should not use method of payment G in Data Element 4/8. The choice cannot be changed once the declaration is submitted.

Most importers use a freight forwarder, customs agent or express operator. HMRC says you must tell them in writing that you want postponed accounting, and they must have that written confirmation before making the declaration. If your supplier arranges the import, agree the treatment with the supplier, give them your EORI number, and keep a written record of what you agreed. An agent acting for you must use your EORI or VAT number on the declaration, otherwise the VAT will appear on someone else’s statement.

How do I get the monthly statement?

You need to have subscribed to the Customs Declaration Service, then sign in with the details you used to register for VAT. HMRC’s guidance says:

  • statements are usually available by the 10th working day of the month
  • each statement shows the total import VAT postponed for the previous month, unless declarations were delayed
  • you can only access a statement for 6 months from publication, after which it is archived, so you must download and keep a copy of each one
  • in a VAT group, each importing member has its own EORI number and statement, and must send it to the representative member

The statement has two parts. Part 1 is a summary showing your VAT and EORI numbers, the total import VAT to account for that month and the amount postponed at each port. Part 2 lists each entry with the date of import, entry number, declarant’s reference and EORI number and the import VAT for that entry. HMRC acknowledges that some entries have been duplicated with the same movement reference number and amount. If you find one, make a manual adjustment and account for the corrected figure.

How do I complete the VAT return?

You account for postponed import VAT on the return for the period covering the date of import. HMRC’s guidance on completing the return says:

Box Entry
Box 1 Import VAT due in the period from the monthly statements, or an estimate if you delayed the declaration and have no statement
Box 4 The import VAT you can reclaim under the normal rules
Box 7 The total value of all imports of goods in the period, excluding VAT

Box 4 is not automatic. Input tax is only recoverable to the extent the goods are used for taxable business purposes, so a partly exempt importer will usually show less in box 4 than in box 1, see VAT partial exemption. A quarterly filer combines three monthly statements, and the figures go on the same return you file through Making Tax Digital for VAT software.

What does a worked example look like?

Illustration only. A fully taxable GB business on calendar quarters imports machinery parts in February. The value for VAT is £40,000, made up of the customs value plus duty and transport to the first UK destination, which is how the guidance on paying VAT on imports says the value is built up. Import VAT at the 20% standard rate is £8,000.

  • The forwarder selects postponed accounting with the business’s VAT number. Nothing is paid at the border.
  • The February statement, published in March, shows £8,000.
  • On the January to March return the business enters £8,000 in box 1, £8,000 in box 4 and £40,000 in box 7.

Net VAT payable on the import is nil. Had the business paid at the border instead, it would have funded £8,000 until the return was processed. If the same importer were 70% recoverable under its partial exemption method, box 4 would show the recoverable share only.

How does it work with VAT accounting schemes?

  • Flat Rate Scheme: do not include postponed import VAT in flat rate turnover. Add the import VAT to box 1 after doing the flat rate calculation. See the VAT Flat Rate Scheme.
  • Cash accounting: HMRC says you cannot use the cash accounting scheme for goods you import or remove from a customs warehouse.

What if I do not use postponed accounting?

The alternatives in HMRC’s imports guidance are to pay import VAT at importation or, for regular importers, to defer payment through a duty deferment account, which is free but needs a bank guarantee (reducible if HMRC authorises Simplified Import VAT Accounting). Either way the VAT can be reclaimed as input tax on goods you own, subject to the normal rules, and HMRC says you need the import VAT statement as evidence. HMRC’s guidance also tells you to check your C79 import VAT certificates and postponed statements in the Customs Declaration Service to make sure all imports are covered. A shipping or forwarding agent usually cannot reclaim import VAT because the goods were not imported for its business.

How are errors and missing entries fixed?

If the import VAT later turns out to be wrong, HMRC says you either amend a nil net tax error on your next return, where the box 1 adjustment equals the box 4 adjustment, or follow the error correction procedures. Customs duty corrections use the existing customs routes, and import VAT must not be included in those. See correcting VAT errors for the thresholds. If an entry is missing from your statement, check whether it appears on another VAT group member’s or a related company’s statement, and ask your agent which EORI number they used.

Common mistakes

  • Not downloading statements before the 6 month window closes.
  • Reclaiming the full box 1 figure in box 4 when the business is partly exempt or the goods are partly for non business use.
  • Agents declaring under their own EORI number, so the importer’s statement is incomplete.
  • Treating postponed import VAT as part of flat rate turnover.
  • Confusing postponed accounting for goods with the reverse charge on imported services, which uses different rules and boxes 6 and 7.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.