If the government changed VAT rules it could dramatically help importers
The chancellor should bring forward the implementation date for “Import VAT Postponed Accounting” from 1 January 2021 to 1 May 2020, say leading tax and advisory firm Blick Rothenberg.
Alan Pearce the firms VAT partner said: “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.”
He added: “This would dramatically help importers at a time when cash-flow is key.”
Alan said: “At present importers have to wait for HMRC 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.
He added: “Even without the added difficulties of getting hold of post during the current restrictions, the old system operating at present put all importers in a disadvantageous cash flow position for up to 3 or 4 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.
Alan, who has long advocated for the reintroduction of this scheme, because it would put the UK on an equal footing with many other EU country’s VAT regimes, said: “Doing this now will be a quick and easy way to further assist businesses with their cash flow during the current crisis. This should not impact government revenues in the long run, so why wait?”