If your business is VAT-registered, you may not need to pay import VAT at the border at all. Here is how it works.
Postponed VAT accounting lets a VAT-registered business declare and recover import VAT on the same VAT return. It does not pay the VAT at the border and wait to claim it back. For most businesses this removes the cash flow gap on imports.
The choice is made on the import declaration. GOV.UK says you cannot change it once the declaration has been submitted.
| Box | What goes in it |
|---|---|
| Box 1 | VAT due on imports you accounted for |
| Box 4 | The same VAT, reclaimed in the same period |
| Box 7 | The value of the imports, excluding VAT |
You account for it in the accounting period that covers the date you imported the goods. The reclaim in box 4 is still subject to the normal rules on input tax. Businesses on the Flat Rate Scheme add the postponed VAT to box 1 after their flat rate calculation.
HMRC publishes a postponed import VAT statement each month in the Customs Declaration Service. It is usually available by the 10th working day of the month and shows the previous month's postponed VAT. It stays available for 6 months, so download a copy. You use it as evidence for your VAT return.
The rules differ by carrier. GOV.UK says that for Royal Mail Group, including Parcelforce, consignments of more than £135 cannot use postponed VAT accounting. Royal Mail offers it on commercial services if the importer asks. For couriers that import on your behalf, give them written instructions to use it before they file.
You pay the import VAT in full when the goods arrive, and then reclaim it as input tax under the normal rules. You need the import VAT evidence, such as the import VAT certificate (C79) or the statement, to support the claim.
A VAT-registered business imports £10,000 of goods that carry no duty. Import VAT at 20% is £2,000. With postponed VAT accounting, nothing is paid at the border. On the VAT return for that period, the business enters £2,000 in box 1, £2,000 in box 4 and £10,000 in box 7. The two VAT figures cancel out, so the net effect on the return is nil, assuming the VAT is fully recoverable.
A change coming: the UK Government has confirmed that the £135 customs duty relief will end by October 2028 (announced 23 June 2026). Nothing changes yet, and this page reflects today's rules. See the government's reforming customs rules for low value imports page.
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A business registered for VAT in the UK. No approval is needed. The goods must be for use in the business, and your VAT number must be on the import declaration. A private buyer cannot use it.
Box 1 for the VAT due, box 4 for the same VAT reclaimed in the same period, and box 7 for the value of the imports excluding VAT. Where the normal input tax rules allow full recovery, boxes 1 and 4 cancel out.
In the Customs Declaration Service. It is usually available by the 10th working day of the month and covers the previous month. It stays available for 6 months, so download a copy.