Deferred VAT in the UK: how does PIVA work?

How to import into the United Kingdom without paying VAT immediately – a guide to PIVA

Since Brexit, every company importing goods into the United Kingdom must expect to pay VAT at customs clearance. For many businesses, this means a significant financial burden, especially with regular imports. The solution is the PIVA system (Postponed Import VAT Accounting), which allows VAT payment to be deferred and included later in the UK VAT return.

What is PIVA and how does it work?

PIVA is a mechanism introduced by the UK’s HMRC after Brexit. It allows companies registered for VAT in the UK to account for import VAT without having to pay it immediately at the border.

In practice, it works as follows:

1. Goods arrive in the United Kingdom – you do not pay VAT at customs clearance.

2. In the next VAT return (UK VAT Return), you enter simultaneously:

• Import VAT due (Box 1)

• VAT to be reclaimed (Box 4)

3. Effect: the transaction becomes cash-flow neutral – VAT does not block capital.

This solution is similar to the “autoliquidation” system used in France, but in the United Kingdom it requires explicitly indicating PIVA in customs documents.

When is PIVA available?

The PIVA system is intended exclusively for businesses and requires meeting three conditions:

1. Registration for VAT in the United Kingdom (UK VAT Number)

Without a UK VAT number, PIVA cannot be used. Companies have two options:

• Direct registration with HMRC (if they have physical presence in the UK)

• Registration via a UK tax representative (for foreign companies, e.g. from Poland or France)

2. Possession of a GB EORI number

The EORI number is a customs identifier required for clearing goods. After Brexit, an EU EORI number (e.g. FR) is no longer sufficient – a UK EORI number starting with “GB” is required.

3. Indicating PIVA on the customs declaration

Even if a company has a UK VAT number and GB EORI, it must inform its freight forwarder or customs agent of its intention to use PIVA. This is crucial – failure to provide this information results in standard VAT payment at clearance.

How to implement PIVA in practice – 4 steps

Step 1: Register for VAT in the UK

• If you have a business establishment in the UK – register through gov.uk (2–4 weeks).

• If you are based abroad – register online or through a tax representative.

Step 2: Obtain the GB EORI number

The EORI number is usually assigned automatically during VAT registration, but it is worth confirming.

Step 3: Inform your freight forwarder

Clearly communicate instructions regarding PIVA at customs clearance.
A simple email can be sent:

Subject: Import to the UK – use of PIVA
Message:
Please apply Postponed Import VAT Accounting (PIVA) when clearing our goods.
Our UK VAT Number: GB123456789
Our GB EORI: GB123456789000

Step 4: Account for PIVA in the VAT return (UK VAT Return)

HMRC publishes a monthly PIVA Statement listing all deferred VAT amounts.

Enter the following values in the VAT return:

• Box 1: VAT due

• Box 4: VAT reclaimed

• Box 7: Net value of imported goods

Box 5 shows 0, as VAT due and reclaimed offset each other.

Financial example

A company imports goods worth €50,000:

For companies importing several times a month, the savings may amount to tens of thousands of euros, which remain in circulation.

Special notes

• Northern Ireland: PIVA does not apply to trade between the EU and Northern Ireland – EU VAT rules apply there.

• Data accuracy: all amounts must come from the official HMRC PIVA Statement, not estimates.

Summary

PIVA is a simple and effective way to defer VAT when importing into the UK, improving business cash flow and reducing operational costs. For companies regularly importing goods from the EU or other countries, this mechanism can generate annual savings of hundreds of thousands of PLN.
By using PIVA, businesses comply with HMRC regulations while maintaining full control over liquidity – a solution beneficial for both small and large enterprises.