Prepare for brexit

Postponed accounting for Import VAT

From a VAT perspective, after Brexit the United Kingdom will become a third country. This means that goods moving between the UK and the EU will be treated as imports and exports instead of intra-EU acquisitions and dispatches of goods.

What does this mean for UK businesses?

The immediate payment of import VAT will have an important financial impact for UK businesses post-Brexit.

In principle, import VAT must be paid immediately to customs authorities at the border where the goods enter the European Union.

Each Member State has the possibility to implement a postponed accounting mechanism via the VAT return, or a deferred payment scheme (or both).

With postponed accounting via the VAT return, the import VAT due is accounted for and paid in the periodic VAT return of the taxpayer.

The UK has announced that postponed accounting for import VAT will be introduced on all imports from 1 January 2021.

This will apply to all goods that are imported from outside the UK.

An online monthly statement will be available to download which will show the total import VAT postponed for the previous month, which can be included in your periodic VAT returns.

There will be changes to the reporting as follows:

  • Box1: Will include the VAT due in this period on imports accounted for through postponed VAT accounting;
  • Box4: Will include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting;
  • Box7: Will include the total value of all imports of goods included on your online monthly statement excluding any VAT

Speak with a real VAT expert

With over 15 years’ experience in the area of VAT compliance and consultancy, we handle all countries and languages where VAT obligations exist. We have a dedicated Brexit team of VAT experts, with a reputation of excellence within the HMRC ready to speak to you about your changing VAT obligations.

Book a consultation

ROI Calc Calculate your ROI