2 April 2020
From 1 January 2021, the UK government has confirmed that it will introduce postponed import Value Added Tax (VAT) accounting to all imports of goods.
By introducing this new mechanism, it will allow all UK VAT registered businesses to avoid having to pay VAT on the clearance of their goods into the UK. Instead, the import VAT amounts will be postponed to the VAT returns and will be entered in the same way as a reverse charge transaction.
It is hoped that this will result in savings on shipping costs and bank charges for the companies who import goods regularly, as well as improve their cash flow as they will no longer have to wait for import VAT to be refunded by the UK tax authorities (HMRC).
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