Postpone your UK import VAT and improve your cash flow

 

As we already covered in our previous article “VAT after Brexit” the UK introduced this new scheme on January 1st in order to make imports easier for UK companies when importing their products.

 

What is postponed VAT accounting?

With postponed accounting, a business can declare and recover VAT on imported products on the same return instead of paying VAT on import and recovering it later. This increases cash flow for businesses and simplifies the process. At the same time accounting for VAT on imports will not be a reason to halt a company’s products at customs.

 

To take advantage of this new scheme businesses will need to enroll in the Customs Declaration Service (CDS). This registration is currently obligatory for all businesses who import goods to the UK and it is also necessary if companies pay VAT upon importation.

 

GVC can help you with your enrollment to the Customs Declaration Service and your yearly collection of documents so that you can benefit from the VAT postponement scheme and increase your cash flow. 

 

This Enrolment offers your company the opportunity to take advantage of Postponed Accounting for Import VAT which is a great way to improve your cash flow as no VAT is needed to be paid at the moment of import.

 

More specifically: “Postponed Accounting for Import VAT” provides a cashflow benefit where the Import VAT is never paid to HMRC at the time of import but rather it is declared as output tax and claimed as input tax on the next VAT return, assuming that the importer is fully taxable.

 

Enrolment is also necessary if you pay import VAT upon importation.

 

SUBSCRIBE TO GLOBAL VAT NEWSLETTER

Get the latest VAT information directly in your inbox and stay up to date with all VAT developments around the world.

You have Successfully Subscribed!