Brexit May Mean VAT Upfront

Jan 10, 2018 | Global News

Tens of thousands of UK businesses could be forced to pay VAT upfront post Brexit, on goods imported from Europe, in controversial new legislation being considered by MP’s on Monday.

The chair of the Treasury select committee has urged MP’s to investigate the matter further before the customs bill gets its second reading in the House of Commons next week.

Under existing rules, goods imported from the EU are referred to as “acquisitions” for tax purposes, so no VAT is paid until the products have been sold to the final customer and paid for.

If passed, the new legislation could mean that goods from the EU will have to be treated like all other imports after Brexit, and may attract VAT at the time of import.

Terry Clear – Managing Director of Uniserve Group Member – Customs Insights – commented “As we get nearer to exiting the EU, the complexities of our future trading arrangements become more and more apparent. It is critical that MP’s making these decisions fully understand the finer details.” 

“Upfront payment of import VAT will clearly create additional cashflow pressure for some companies. From an operational standpoint, the processing time at ports and border entry points will increase and more responsibility to collect state funds will fall back on logistics providers.”

“Of course we will await the outcome of next week’s debate, and as one of the UK’s leading customs specialists we will pursue HMRC for clarification.”

For further information on the above, or to find out more about Uniserve’s premium European services, please call 01708 259400 or email info@ugroup.co.uk

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