Import VAT is not a cost for a VAT-registered business — unless it is paid by someone else on your behalf. That distinction is worth more than most freight savings.
Import VAT on most goods entering the UK is 20%. It is not charged on the invoice value alone:
Worked example: goods invoiced at £20,000, freight and insurance to the UK border £1,200, duty at 4% on the customs value of £21,200 (£848). The VAT base is £22,048, so import VAT is about £4,410.
That money is due before the goods are released — unless you use postponed VAT accounting. This is the reason a first-time importer can be surprised by a bill four times the size of the duty.
Postponed VAT accounting, introduced when the UK left the EU customs regime, lets a VAT-registered importer declare import VAT on its normal VAT return instead of paying it at the border. You show it as output VAT and reclaim it as input VAT in the same return, so the net cash effect is zero — assuming you can recover all your VAT.
Practically, this means:
The cash flow difference is meaningful. On the example above, PVA keeps roughly £4,400 in your business for the two to three months between import and VAT recovery. Across several containers a year that is often the difference between being able to reorder and having to wait.
Here is the trap. A forwarder offering “DDP, all-in, VAT included” will normally clear the goods on its own EORI, because that is the only way it can guarantee a single price without waiting for your registration paperwork. It then pays the import VAT and reclaims it on its own return. You receive an invoice with no VAT line at all.
That is convenient, and for a non-VAT-registered buyer it is genuinely the cheapest structure. But if you are VAT-registered, you have just paid the VAT as an embedded cost with no way to recover it. The forwarder is not doing anything wrong — it is simply a different product from clearing on your own EORI.
| Structure | Who reclaims VAT | Best for |
|---|---|---|
| Forwarder DDP (their EORI) | Forwarder only | Non-VAT-registered buyers, samples, one-offs |
| DDP on your EORI + PVA | You | VAT-registered businesses importing regularly |
| DAP / FOB with your broker | You | Importers with existing customs arrangements |
The fix is a sentence in the booking: “Please clear on our GB EORI [number] with postponed VAT accounting.” A competent forwarder will do this without changing the freight price, because the work is the same — only the name on the declaration differs.
HMRC expects you to be able to show the VAT was correctly accounted for. Keep together, per shipment:
These are the same documents you would need if HMRC opens a compliance check two years later, and they take five minutes to file at the time and weeks to reconstruct afterwards.
Import VAT becomes a real cost, and it is charged whether or not you are registered. If you are importing to sell, registering is usually worthwhile long before you hit the turnover threshold — voluntary registration lets you recover import VAT from the first shipment and looks more credible to B2B customers.
If you are testing a product, keep the first order small enough that the VAT is an acceptable cost of learning, and use a forwarder's DDP so you are not managing declarations yourself. Once you are confident the product sells, register and switch to clearing on your own EORI.
We can quote either structure so you can see both numbers side by side — send us your shipment details and say whether you want the quote with your EORI and PVA or as an all-in DDP.
Yes. Import VAT applies to the goods regardless of your registration status; if you are not registered you cannot reclaim it, so it becomes part of your cost.
No, it is optional. Your broker needs to be instructed to use it, and you must be VAT registered with a UK VAT number.
It was the monthly paper statement of import VAT, largely replaced by the online PVA statement for postponed accounting. Older shipments and non-PVA imports may still reference C79.
Normally no — the VAT was recovered by whoever was importer of record. To reclaim it you need the declaration made on your own EORI.