The CIOT has given a cautious welcome to the government’s acknowledgment in the Budget of how important postponed accounting for import VAT is in providing businesses with cash flow help when importing goods from the EU. The Budget report noted the government ‘will take this into account when considering potential changes following EU exit’.
Postponed accounting for import VAT allows businesses to offset VAT via their quarterly returns for imports from the EU. For imports from outside the EU, a business has either to pay VAT at the point of import, or via a deferment account, and then claim it back up to three months later in the VAT return.
Alan McLintock, chair of CIOT’s indirect taxes sub-committee, said: ‘Continuing postponed accounting after Brexit would avoid a huge strain on businesses’ cash flow and ease their respective administration work, especially as it is estimated that around 180,000 business are set to have to deal with customs declarations that have not before, once we leave the EU.’ He cautioned, however, that this does not yet amount to a promise by the government to implement postponed accounting after Brexit.
The CIOT has given a cautious welcome to the government’s acknowledgment in the Budget of how important postponed accounting for import VAT is in providing businesses with cash flow help when importing goods from the EU. The Budget report noted the government ‘will take this into account when considering potential changes following EU exit’.
Postponed accounting for import VAT allows businesses to offset VAT via their quarterly returns for imports from the EU. For imports from outside the EU, a business has either to pay VAT at the point of import, or via a deferment account, and then claim it back up to three months later in the VAT return.
Alan McLintock, chair of CIOT’s indirect taxes sub-committee, said: ‘Continuing postponed accounting after Brexit would avoid a huge strain on businesses’ cash flow and ease their respective administration work, especially as it is estimated that around 180,000 business are set to have to deal with customs declarations that have not before, once we leave the EU.’ He cautioned, however, that this does not yet amount to a promise by the government to implement postponed accounting after Brexit.
