HMRC publishes guidance on accounting for VAT in event of a ‘no deal’ Brexit
HMRC has published guidance on how businesses should account for import VAT in the event that the UK leaves the EU without a Brexit deal.
According to the guidance, if the UK leaves the EU without a deal, VAT-registered businesses may choose to account for import VAT on their VAT return, as opposed to paying when the goods arrive at the UK border. Goods from both EU and non-EU countries will be covered by the rules.
If businesses are not registered for VAT in the UK, they will not be able to record the import VAT on their VAT return, and will be required to pay VAT up front at the time of import.
Any goods already in transit from the EU must continue to be treated as acquisitions, and VAT must be accounted for on the return for the period in which the acquisition occurred.
From 29 March 2019, all businesses importing goods into the UK will need a UK Economic Operator Registration and Identification (EORI) number. HMRC intends to write to all VAT-registered importers and exporters in order to explain the steps they will be required to take in the event of a no deal Brexit scenario.
Jim Harra, Deputy Chief Executive of HMRC, stated that HMRC ‘recognises the challenges businesses face’ in getting to grips with the new requirements by 29 March 2019. Mr Harra said that the Revenue is ‘committed to supporting’ firms.