Q. My business imports goods from the European Union. What is the current position regarding postponed accounting for VAT?
A. There is now a transition period until the end of 2020 during which the UK and EU negotiate additional arrangements. The current rules on trade, travel, and business for the UK and EU will continue to apply during the transition period. In broad terms, new rules will take effect on 1 January 2021.
HMRC have confirmed that from 1 January 2021, postponed accounting for VAT will apply to all imports of goods, including from the EU. This will allow businesses to account for VAT on imports through their periodic VAT return as opposed to having to pay that VAT at the UK border.
Our blog on the update to government guidance advising customers to cancel VAT direct debits can be found here.