Customs and VAT: Brexit transition

The Customs and Value Added Tax (Managed Transition Procedure) (EU Exit) Regulations, SI 2021/1375 extend the end date of the Customs (Managed Transition Procedure) (EU Exit) Regulations, SI 2019/487 from 31 December 2021 to 31 December 2022 and set out how VAT registered businesses making customs declarations by conduct on importation account for import VAT.

Under the 2019 Regulations, HMRC has the power to make certain provisions by public notice including, for example, setting out who is an ‘eligible person’ to make a customs declaration at the border, the location and circumstances in which such declarations may be made and information requirements. The extension of the existing Regulations will allow HMRC to address disruption arising from the application of full customs controls at GB border locations for EU-GB imports and exports from 1 January 2022.

The Regulations also provide that, where a VAT registered business makes a declaration by conduct under the customs public notice provisions, it must bring the import VAT to account in its VAT return at that point rather than waiting for the supplementary declaration. The Regulations came into force on 31 December 2021.