This arrangement will allow importers to off-set import VAT via their VAT returns, rather than pay it upfront at the time of importation and then have to wait to recover it months later via their VAT returns.
This would dramatically help importers at a time when cashflow is key.
At present, importers have to wait for HM Revenue & Customs to issue monthly import VAT certificates before being able to claim import VAT. These are original documents, known as forms C79, and are posted out to the importer’s registered address and used to support the claim of import VAT.
Even without the added difficulties of getting hold of post during the current restrictions, the old system operating at present puts all importers in a disadvantageous cashflow position for up to three or four months as most will be filing returns on a quarterly basis.
The UK Government has already announced that it will be introducing a postponed import VAT accounting regime from the beginning of next year as part of the administrative measures to ease the effects of Brexit.
Doing this now will be a quick and easy way to further assist businesses with their cashflow during the current crisis. This should not impact Government revenues in the long run, so why wait?
If you would like to discuss any of the above or have other queries about how you can make the right decisions for the future of your business and your income, please contact your usual Blick Rothenberg contact or Alan Pearce.
You can also visit our Coronavirus – Practical Guidance for businesses today Hub for our latest updates and insights.