News added on 09.01.2018

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Import duties

Upfront VAT charges for UK importers?

It's reckoned that 130,000 UK business could have to pay VAT upfront following Brexit. What's the full story?

At present, a UK business importing goods from the EU only accounts for the VAT on the eventual selling price. It's a paper cross-border exercise. However, importers of goods from outside the EU pay the VAT upfront and then recover the VAT once the item has been sold. Under the Taxation (Cross-Border Trade) Bill it's possible that UK importers of goods from the EU will also have to pay the VAT upfront - the cash-flow consequences of this could be disastrous. The Treasury says that the precise terms of the UK's future customs relationship with the EU have yet to be agreed. We'll be watching developments with interest.

Of course the importation of services works in a different way with most exporters accounting for the VAT. This is likely to remain the case following Brexit.

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