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UK import VAT Brexit update


The UK’s HMRC has provided updates on the treatment of import VAT on EU goods movements in the case of a no-deal Brexit on 29 March 2019.

When the UK leaves the EU VAT regime on Brexit, goods coming from the EU27 will become subject to 20% UK import VAT for the first time. HMRC has already announced the launch of a Postponed Accounting scheme, which will allow importers to defer the VAT payment to their next VAT return. Using the ‘reverse charge’ mechanism, they can declare the VAT without having to make a cash payment of the import VAT. This is similar to schemes operated in 19 other EU states. 

The new Postponed Accounting scheme will apply to EU and non-EU imports. Non-VAT registered importers will have to pay the import VAT to clear their goods into the UK.

How to use Postponed Accounting for import VAT

There are two ways to apply the new deferred VAT scheme:

1.    Importers will need to have obtained an Economic Operator Registration and Identification (EORI) number to include on the import documents. They can use this through HMRC’s Customs Handling of Import and Export Freight (CHIEF) system. This IT system is to be replaced by CDS; or

2.    VAT number on the customs declaration

In the next quarterly (monthly for very large tax payers) VAT return, the import VAT value should be included in Box 2, with a matching negative in Box 4. The value of the imports should be included in Box 9.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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