Brace for Brexit 21: Preparing for postponed VAT accounting

Businesses must take two preliminary steps before they can use postponed accounting to delay payment of import VAT. New HMRC guidance explains what importers must do.

22nd Dec 2020

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Jason Croke

VAT Director Rayner Essex

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Up until 31 December 2020, import VAT is payable upon goods arriving into the UK from outside the EU. That VAT is usually paid by the freight agent, or the buyer may have a deferment account.

Import VAT from 2021

From 1 January 2021, the way import VAT (and duty) is accounted for will change, regardless of whether a trade deal is reached with the EU or not. You need to take action now if you import any goods into GB.

Any goods entering the UK, from anywhere in the world (including EU), will be subject to import VAT. Import duty may also be due - that remains a matter for the future trade deal with the EU, but the VAT element is a known certainty.

The GB buyer (importer) is usually the party responsible for paying import VAT, although the seller may be responsible if that is what they have decided.

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Jason Croke

VAT Director Rayner Essex

Jason has over 20 years’ experience working exclusively in indirect taxes (VAT, import duty, SDLT) with owner-managed businesses, corporates and not for profit sectors. He particularly enjoys challenging HMRC decisions, representing clients in tribunals or during inspections.

Experience includes land and property, partial exemption and...

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By juanmoody

06th Feb 2021 21:36

Hi,

Thank you very much for your article.

I wanted to ask: what happens when you are self-employed, and you are not VAT registered (because you are under the threshold). Do you have to register for VAT now if you are importing goods from the EU?

I am importing bottled olive oil (zero-rated VAT) that comes from Spain. Would I be able to pay VAT when doing the import (should be 0 pounds if it´s zero-rated) and continue without registering for VAT?

I also sell in the EU, but I ship directly from Spain to the customer, not leaving the EU. Would that transaction be VAT exempt for me if I don´t own the stock at any time?

Regards

Thanks (0)

Content series

Brace for Brexit

Brace for Brexit: VAT on dispatches and arrivals

Brace for Brexit 2: Postponed accounting

Brace for Brexit 3: Import Duty and commodity code