The VAT rules have changed from 1 January 2021. UK VAT registered businesses are able to account for import VAT in their VAT returns for goods imported into GB from outside the UK on a deferred basis, provided certain requirements are met. There are new rules for low value consignments: the previous relief is replaced by rules aligning with the threshold for customs duty. Whilst the changes are intended to simplify the process, there are several complexities and overseas sellers should monitor carefully for the different kinds of transactions that might arise. Further, HMRC’s confirmation that it is only the owner of the goods that has the right to recover UK import VAT will present practical challenges for many businesses.
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The VAT rules have changed from 1 January 2021. UK VAT registered businesses are able to account for import VAT in their VAT returns for goods imported into GB from outside the UK on a deferred basis, provided certain requirements are met. There are new rules for low value consignments: the previous relief is replaced by rules aligning with the threshold for customs duty. Whilst the changes are intended to simplify the process, there are several complexities and overseas sellers should monitor carefully for the different kinds of transactions that might arise. Further, HMRC’s confirmation that it is only the owner of the goods that has the right to recover UK import VAT will present practical challenges for many businesses.
If you or your firm subscribes to Taxjournal.com, please click the login box below:
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