VAT treatment of goods post-Brexit – What you need to know

VAT treatment of goods post-Brexit – What you need to know

The latest official guidance on the Brexit transition outlines the process of accounting for VAT on goods that are imported from and exported to the EU.

This article focuses on the rules for importing goods into the UK.

As businesses prepare for a new era of trade with the EU after 31 December 2020, it is important that they understand the ins and outs of reporting and paying VAT.

Goods that move into the UK from the EU after 1 January 2021 will be considered imports, meaning import VAT and customs duties will be payable and customs declarations will need to be made.

However, import VAT will no longer be payable as goods enter the UK and, instead, businesses will account for VAT on all goods imported using a postponed accounting system.

This means that import VAT will be accounted for and paid via the usual VAT return, which will lead to an improved cash flow position for many businesses.

Although this chance coincides with Brexit, it will apply to all imports into the UK by VAT registered importers, not just imports from EU countries. In most cases importers will be able to also reclaim the import VAT as input tax and so there will be a nil net tax effect on the VAT return.  For assistance contact us.

UK VAT Advice Ltd are part of the Haslers Group providing VAT consultancy to a variety of clients locally and nationally and a helpline and consultancy service for professional advisers.

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VAT treatment of goods post-Brexit – What you need to know

VAT treatment of goods post-Brexit – What you need to know
VAT treatment of goods post-Brexit – What you need to know