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Brace for Brexit 4: Defer import duty


Jason Croke implores businesses to start reviewing their options regarding customs duty and deferment accounts, as new VAT and customs duty rules will apply from 1 January 2021.

4th Nov 2020
VAT Director Rayner Essex
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Mindful of the disruption that the end of the transition period may involve, the government has introduced a number of PF measures to limit the initial impact of Brexit - the 'cliff edge' often referred to in the media. But such measures are temporary, and business owners may need to consider the short and long term plans for the business in terms of import duty and cashflow.

EORI (Economic Operator Registration and Identification) Number

This is a number used by freight handlers and customs when goods move between countries. It is important to ensure businesses have an EORI number. 

Check this website to see if your business already have an EORI number. If you don’t have an EORI number then it's a good idea to apply for one - it's free and only takes a few minutes.

Postponed Accounting

There are two measures introduced from 1 January 2021 relating to VAT and import duty.

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Replies (2)

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By tom123
04th Nov 2020 14:55

Is the deferral of VAT and duty automatic, or do we have to apply for it?

Thanks (1)
Replying to tom123:
Jason Croke
By Jason Croke
05th Nov 2020 12:03

Both are automatic.

The import VAT you just process via your VAT return (ie, declare the import VAT in Box 1 and reclaim same in Box 4, assuming you are not partially exempt)). So this will be driven by the shipping paperwork, so your VAT number/UK EORI number will be key.

The import duty you enter the transaction into your own records, but eventually need to submit the full import declaration to HMRC via CHIEF/CDS (so you either do this yourself by upskilling/getting to understand the import paperwork and how to file it or you get your freight/shipping agent to do this).

It does raise a question that if you are using an agent to handle the importation paperwork, will the agent be happy to effectively sit on a load of paperwork relating to importations and file them 6 months later so that you enjoy the benefit of the 6 month deferment. I will look into this and get back to you.

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