HMRC has issued new guidance on the VAT position for goods imported after a no-deal Brexit. Imports from inside and outside the EU may be affected.
How might this affect your business?
At the time of publication, a “meaningful vote” on whether to accept the government’s Brexit deal is imminent. The odds are stacked against it being approved by Parliament so businesses need to be ready in case we exit the EU without a deal.
There’s official guidance on changes to customs procedures in that event and now there’s information about how to account for VAT on imports.
The key think is that if you import, or intend to import, goods from the EU and don’t have a UK Economic Operator Registration and Identification (EORI) number already, you’ll need to obtain one in case of a no-deal Brexit.
An EORI number can be obtained online in a matter of minutes by visiting www.gov.uk/eori.
Unless it’s delayed, Brexit will occur at 11.00pm on 29 March 2019 and the procedure for accounting for VAT changes for imports arriving after that point.
Goods in transit to the UK at that time are subject to the new VAT procedure.
Accounting for VAT
HMRC will generate monthly lists of imports linked to your EORI number. You must download and keep these with your records as you’ll need to account for VAT on this value in your next return instead of paying it at the time of entry into the UK.
If you’re entitled to reclaim VAT on goods you’ve purchased from outside the UK, the new procedure will mean that you don’t suffer cash-flow problems as a result of Brexit, i.e. because usually you’ll be accounting for and reclaiming the VAT on the imports on the same return.
Read all about it!
There are various nuances and exceptions to the new procedure so it’s vital that if you import goods you read HMRC’s latest guidance on the new procedure, which might change at very short notice.
Visit www.gov.uk/guidance/accounting-for-import-vat for more information.