Posted: March 7, 2019
HMRC have published further details on how import / export procedures will change should a ‘no deal’ Brexit occur on the 29 March 2019. This guidance has been set out in a letter issued to many businesses in the last few days – the full text of the letter can be viewed at: https://bit.ly/2J05CtU
Proposed changes to VAT arising on a ‘no deal’ Brexit are a significant relaxation to the current VAT rules – these changes are known as postponed accounting. Currently where goods are imported to the UK from outside the EU they are required to pay UK VAT when these goods arrive in the UK. This currently presents a cash flow challenge for businesses as this VAT is not generally recovered for several months.
Under postponed accounting the VAT on all goods arriving in the UK – both from inside and outside the EU – will be payable on the next VAT return submitted by the business. This will remove the current cash flow barrier applying to businesses bringing goods to the UK from outside the EU.
These change will however only come in to effect in the event of a ‘no deal’ Brexit.
Please contact us if you have any queries regarding these matters.