Postponing or Deferring Import VAT: What is the difference?

There is a lot of confusion about what to do with import VAT when importing goods into the UK. 

Since 1 January 2021, HMRC has introduced postponed import VAT accounting (PIVA). This is different to deferring VAT (see below).

Postponed VAT works by your courier selecting PIVA as the method of payment at import. No VAT is ever actually paid; instead the VAT is accounted for on your VAT return in Box 1 & Box 4.

Instead of an import certificate C79, a monthly report can be downloaded using your government gateway account from this user.

See Get your postponed import VAT statement - GOV.UK 

You should ask each of your couriers to use PIVA.

The benefits of using PIVA over deferring you VAT include the cash flow positive of never paying the VAT, as well as a cost saving of not incurring deferment charges from your couriers for using their deferment account. 

Deferring VAT

Deferring VAT, on the other hand, is where VAT on imports is allocated to a deferment account instead of it being paid at the point of import.

A deferment account is likely to be the account of one of your couriers. This deferred VAT is then paid the following month by direct debit.

You are invoiced by your courier, the VAT paid is reclaimable with reference to a C79 which is produced and sent automatically by post to you from HMRC.

Further information

If you would like help and advice with VAT on imports or exports, please contact a member of our VAT team, and check out our International Advisory Knowledge Hub.