Blick Rothenberg partner Alan Pearce shares his thoughts on what the Chancellor might and should do at next week's Budget.
The Chancellor should
re-introduce “Postponed Accounting for import VAT.” This would allow business to off-set import VAT via their quarterly VAT returns rather than have to pay it at the point of importation and claim it back up to 3 months later. This would provide a significant administrative easement and assist cash flow for UK businesses importing goods. Apart from the one-off cash flow hit, it should not affect Government revenues.
This would also allow the UK to compete on an equal footing with many other EU countries, notably the Netherlands and more recently France who adopted this treatment last year. Those EU countries that already operate a postponed accounting regime have a competitive edge over the UK and often promote it as an incentive to do business there rather than the UK.
This issue will become more important in the run up to Brexit and beyond. A change to the UK’s current policy of collecting import VAT at the time of importation will demonstrate that we are open for business and would simplifying the import regime for future trade with the countries beyond the EU.
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