New VAT and Customs Duty Developments in Brexit

With Brexit around the corner there are many changes occurring across the board, including with VAT.

Ireland is to introduce postponed accounting for import VAT after a no-deal Brexit, to match the UK, leaving only Cyprus, Germany, Italy and Slovakia who charge import VAT at the time of arrival of goods from a non-EU country.

Further information about the Transitional Supplementary Procedures (TSP) has been provided by HMRC. TSP reduce the amount of information that an importer has to give to HMRC in an import declaration (SAD) when the goods arrive in the UK, by allowing the importer to defer giving a full declaration and paying import duty. The full import entry must be submitted to HMRC by the 4th working day of the following month. Application to use TSP must be made to HMRC. These procedures only apply to Roll On-Roll Off (RoRo) vehicle freight and not to air or sea freight, at the following ports:

Channel Tunnel, Dover, Felixstowe, Fishguard, Harwich, Heysham, Holyhead, Hull, Immingham, Liverpool, Newhaven, Pembroke, Plymouth, Poole, Portsmouth, Purfleet, Ramsgate, Sheerness, Teesport, Tilbury and Tyne.

Previous updates highlighted the loss to UK businesses arising from a no-deal Brexit of the VAT simplification procedure called triangulation, for goods moving within the EU.  Also it is now apparent that the VAT simplification for call-off stocks will be lost also. This simplification allows UK businesses to store goods in another EU member state, which can be called off/adopted by a single customer as required, with title passing to the customer as each new order is received. It removes the need for the UK business to register for VAT in the other EU member state. The loss of these two simplifications will require some UK businesses to register for VAT in the EU (potentially in more than one member state), and EU businesses to register for VAT in the UK.

In the week commencing Monday 25 February it is expected that the UK government, the Department for International Trade, will publish a list of new import duties that will apply to 5,200 products should the UK leave the EU without a deal.

For more information please contact me on the details listed above or the VAT team on +44 (0)1635 35255