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Markel Tax

04 May 2020

Import goods into the UK from outside the EU

Question: I import goods into the UK from outside the EU and incur significant import VAT, how can I improve cash flow?

Answer: Import VAT payments can be deferred by opening a specific Import Duty and VAT Deferment Account with HMRC. 

This Deferment Account allows the business to make one payment a month (on the 15th) through direct debit instead of paying for individual consignments. The business will be required to offer a guarantee to HMRC, which will involve asking its bank, building society or insurance company to guarantee the import liabilities. The business will be required to give HMRC a direct debit instruction. Once accepted by HMRC, this is a useful automatic deferral of the duty and VAT liabilities on the importation of goods.

As a further support to businesses experiencing financial difficulty as a result of COVID-19, whether or not the business holds a Deferral Account with HMRC, the due date for payments can be further extended. This extension is subject to HMRC’s prior approval and the business must be a registered importer or have a Deferral Account. The extension to payments will not affect the Deferral Account guarantee or cause any disruption to the business’ existing Deferment Account. This additional time to pay could be invaluable for the business and provide much needed help to its cash flow.

If you need support or further information regarding VAT on importation, please contact Punnit Vyas at Markel Tax on 0203 815 8999.

Tagged Value added tax (VAT) services Value added tax (VAT) services Consultancy services