How to get the monthly statement, which figures go in which boxes, and what goes wrong when the statement and the purchase ledger disagree. Written by a Chartered Management Accountant who ran finance for a pharmaceutical wholesaler importing around 1,000 product lines.
This is the part people actually come looking for, so it goes first.
Statements are published in your Customs Declaration Service financial dashboard. You sign in with the Government Gateway credentials linked to the EORI number used on the import declaration — not necessarily the login you use for VAT returns, which is the first place this goes wrong where customs and finance sit with different people.
Each statement covers one calendar month and is usually available by the 10th working day of the following month. That timing matters for a business on monthly returns, and it matters at the quarter end: a March statement is not there on 1 April.
Entries usually have not vanished — they are on a different EORI number. Work through it in this order:
Before postponed accounting, import VAT behaved like any other border charge. It was paid at importation — in cash, through a duty deferment account, or by the freight agent who then billed it on — and recovered as input tax on a later return once the C79 arrived. The VAT was always recoverable. The problem was the timing: a business could be funding 20% of everything it imported for three or four months. In a wholesaler bringing in several hundred thousand pounds of stock a month, the sum permanently out with HMRC runs to six figures, financed at whatever the overdraft costs.
Postponed accounting removes the gap. Nothing is paid at the border, the import VAT is declared and recovered on the same return, and the cash never leaves. It is not a relief or a saving — the arithmetic ends in the same place — it is a cash-flow mechanism, and that is the whole point of it.
The business must be registered for VAT in the UK, and the goods must be imported into Great Britain from outside the UK, or into Northern Ireland from outside the UK and EU. Beyond that, HMRC's guidance is explicit that no approval is needed. There is no application, no authorisation number, and nothing to renew.
You elect per consignment on the import declaration. On the Customs Declaration Service that means the VAT registration number is entered at header level in Data Element 3/40, and method of payment G is not used in Data Element 4/8. The election cannot be changed once the declaration has been submitted.
A few things sit outside it: goods received through Royal Mail Group in consignments over £135, commercial goods in baggage declared through the simple online route, and non-business goods except for bodies reclaiming through a VAT refund scheme. Where goods come out of a special procedure — customs warehousing, inward processing, temporary admission, end use — the election is made on the declaration releasing them to free circulation.
| Box | What goes in it | Source |
|---|---|---|
| Box 1 | Import VAT due in the period on imports accounted for through postponed VAT accounting, added to your normal output tax | Monthly statement |
| Box 4 | The same import VAT reclaimed as input tax, subject to the normal recovery rules | Monthly statement |
| Box 7 | The value of the imported goods, excluding VAT, within the total value of purchases | Statement or ledger |
| Box 2 | Nothing. Box 2 is for acquisitions of goods into Northern Ireland from the EU, not for postponed import VAT | — |
For a fully taxable business boxes 1 and 4 carry the same figure and the net effect is nil. Where the business is partially exempt or has non-business use, box 1 still takes the full import VAT but box 4 only takes what is actually recoverable — so postponed accounting produces a real liability rather than a wash, and the partial exemption calculation has to be fed the right numbers.
Box 7 is the one that gets missed. People take the import VAT off the statement, put it in boxes 1 and 4, feel finished, and never add the net goods value. The VAT payable is right and the return is still wrong.
A company imports machinery. Supplier invoice £40,000. Freight and insurance to the first UK destination £1,500. Customs duty at 4%. Goods arrive 2 April; the VAT quarter ends 30 June.
| Step | Calculation | Amount |
|---|---|---|
| Goods | Supplier invoice | £40,000 |
| Freight | To first UK destination | £1,500 |
| Customs value | £40,000 + £1,500 | £41,500 |
| Duty | 4% of £41,500 | £1,660 |
| VAT value | £41,500 + £1,660 | £43,160 |
| Import VAT | 20% of £43,160 | £8,632 |
With postponed accounting. Nothing is paid at the border except the £1,660 duty. On the return for the quarter to 30 June: box 1 includes £8,632, box 4 includes £8,632, box 7 includes £43,160. Net VAT effect nil. Cash out of the door for VAT: nothing, ever.
Paying at the border instead. The £8,632 is paid at importation — on a deferment account that settles around the middle of May, or immediately if the agent fronts it and bills it on with a handling fee. It is then reclaimed in box 4 on the return for the quarter to 30 June, which is filed and settled by 7 August. Box 1 takes nothing, box 7 still takes £43,160.
Same tax, same duty, same end position. The difference is that in the second case £8,632 sat with HMRC for roughly twelve weeks — and that is one consignment. Run thirty a month and the permanent balance outstanding is what you are financing. Postponed accounting covers VAT only: duty is payable at importation either way.
A C79 is a monthly import VAT certificate showing import VAT you have actually paid at importation, and it is the evidence for the input tax claim. It is obtained through HMRC's payment records service, signed into with details linked to your EORI number, and like the PVA statement it is usually published by the 10th working day of the following month and available for six months before archiving.
| PVA statement | C79 certificate | |
|---|---|---|
| Covers | Import VAT postponed, not paid at the border | Import VAT paid at importation |
| Boxes | 1, 4 and 7 | 4 and 7 only |
| Cash paid at import | None | Full import VAT |
You still see a C79 where VAT was paid rather than postponed — the agent did not make the election, the consignment fell outside postponed accounting, or paying was a deliberate choice. Plenty of importers receive both documents every month, and the two reconcile to different parts of the return.
Sage. Recent versions include a dedicated tax code for imports under postponed VAT accounting — commonly T18, which populates boxes 1, 4 and 7 from a single posting — and a separate code for imports where VAT is not postponed, commonly T19, which hits boxes 4 and 7 only. The numbering is version-dependent and tax codes are configurable, so check the descriptions in your own tax code list rather than trusting a remembered number. There is more on this in the guide to Sage VAT codes.
Xero. The supplier bill is entered for the goods value using a zero-rated or no-VAT rate, which captures box 7. The import VAT itself is then entered as a PVA adjustment on the VAT return, month by month, using the figure from the monthly statement — Xero adds it to boxes 1 and 4 without needing journals. The adjustment is per month, so a quarterly return takes three entries from three statements. Check the current rate list in your own organisation, since Xero has changed how this is handled more than once.
Either way, the discipline is the same: the statement is the source document, the posting is reconciled to it, and the download is filed.
It is not supposed to. Import VAT is charged on the customs value, which includes transport, insurance, packing and handling to the first UK destination, plus any customs duty, levy or excise duty payable on importation. In the example above, 20% of the supplier invoice is £8,000 but the import VAT is £8,632. A statement higher than 20% of the invoice is normal, and the difference should be traceable to freight and duty on the declaration.
The statement is the evidence. Estimating the import VAT because the quarter end came round before the statement was published, and then never going back to check it, is the version of this that gets found on an enquiry. The lawful route for a genuinely delayed declaration is HMRC's — estimate, then correct — not a permanent estimate.
Worth repeating, because it is the commonest cause of a statement that does not look like the shipping records. Reconcile declarations on the statement to consignments received; if they do not agree, the gap is on a C79 or somebody else's EORI.
Where a business holds both a C79 and a PVA statement for the same period, a consignment occasionally appears on both — usually because it was re-declared or amended. Claiming it twice is an overclaim with interest attached. The control is to reconcile both documents by declaration, rather than entering totals from each.
This is general information and not advice on a specific import. The VAT treatment of any particular consignment depends on the goods, the terms of supply, the customs procedure used and the recovery position of the business, and where a position is genuinely uncertain it is worth getting it confirmed. We prepare VAT returns, management accounts, year-end accounts and Corporation Tax on Xero or Sage. We do not undertake audit, customs declarations or specialist tax advice; customs work is referred to a customs agent and specialist tax to a specialist firm.
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