Total value of goods imported per month (CIF value)
Average customs duty rate across your imported goods
Your bank interest rate or cost of capital for opportunity cost calculation
Reg. 07380272 · England & Wales · Est. 2010
Want to improve import cash flow?
Get help setting up Postponed VAT Accounting, duty deferment accounts, and other cash flow optimisation strategies.
Annual Import VAT
£126,000.00
Cash Flow Saving
£708.75
Recommendation
Switch to Postponed VAT Accounting (PVA) to eliminate the cash flow cost of paying import VAT at the border. VAT is accounted for on your VAT return instead, with no upfront payment required.
Pay at Border
Postponed VAT Accounting
Switch to Postponed VAT Accounting (PVA) to eliminate the cash flow cost of paying import VAT at the border. VAT is accounted for on your VAT return instead, with no upfront payment required.
Based on your monthly import value of £50,000.00, using PVA could save you £708.75 per year in cash flow and opportunity costs compared to paying VAT at the border.
Everything you need to know about PVA and border VAT payments
What is Postponed VAT Accounting (PVA)?
Postponed VAT Accounting allows UK VAT-registered businesses to account for import VAT on their VAT return rather than paying it at the point of import. Instead of paying VAT to customs when goods arrive at the border, you declare the import VAT as both input and output tax on your next VAT return. This means the VAT effectively cancels itself out, and you never need to physically pay import VAT upfront. PVA has been available to all UK importers since 1 January 2021.
How does paying VAT at the border work?
Without PVA, import VAT must be paid when goods enter the UK. This is typically handled by your freight forwarder or customs broker, who will collect the VAT (and any customs duty) before releasing the goods. You then reclaim this VAT as input tax on your next VAT return. However, this creates a cash flow gap — you pay the VAT upfront and only reclaim it weeks or months later when your VAT return is processed. For businesses importing significant volumes, this can tie up substantial amounts of working capital.
What is the cash flow impact?
The cash flow benefit of PVA can be significant. When paying at the border, your cash is tied up from the date of import until your VAT return is processed and the refund is received — typically 30 to 90 days. With PVA, no cash leaves your business at all. The opportunity cost of having that cash tied up depends on your cost of capital or the interest rate you could earn. For a business importing £50,000 of goods per month, the annual cash flow saving can run into thousands of pounds.
How do I register for PVA?
You do not need to register separately for PVA. Any UK VAT-registered business can use it immediately. To use PVA, simply instruct your customs broker or freight forwarder to select PVA as the method of payment for import VAT when completing the customs declaration. You will then receive a monthly postponed import VAT statement from HMRC, which you use to complete your VAT return. You must keep these statements as part of your VAT records.
What is a Duty Deferment Account?
A Duty Deferment Account (DDA) is a separate arrangement that allows you to defer payment of customs duty and import VAT. With a DDA, instead of paying charges on each individual shipment, you make a single monthly direct debit payment. While PVA eliminates the need to physically pay import VAT, a DDA can still be useful for deferring customs duty payments. A DDA requires a guarantee (usually a bank guarantee or customs comprehensive guarantee) unless you qualify for a waiver.
How do I choose the right approach?
For most VAT-registered importers, PVA is the better option as it eliminates the need to pay import VAT upfront entirely. The only scenario where paying at the border might be preferable is if your business is not VAT-registered (in which case PVA is not available) or if you have specific arrangements with your customs broker. If you import regularly and are VAT-registered, switching to PVA is straightforward and provides immediate cash flow benefits with no downside. Consult your accountant or customs broker if you are unsure.
HMRC-Aligned: This calculator uses the standard UK import VAT rate of 20% and models the cash flow impact of PVA vs border payment for the 2025/26 period. Actual savings depend on your specific import patterns, VAT return frequency, and processing times. For complex import arrangements, consult a customs specialist or accountant.
This calculator uses official rates and thresholds from:
Last verified: February 2026 · Tax year 2025/26. Results are indicative — consult a qualified accountant for personalised advice.
Reviewed by M. Samiuddin Quadri, ACCA — Chartered Certified Accountant at Gladstone & Co. · Updated for the 2025/26 tax year.
Disclaimer: This calculator provides estimates based on current HMRC rates and thresholds for the 2025/26 tax year. It does not constitute professional tax, financial, or legal advice. Your actual liability may differ depending on your individual circumstances. Always consult a qualified accountant or tax adviser before making financial decisions. Read our terms