VAT on imports from UK from 1st January 2021

VAT on imports from UK from 1st January 2021 ?

Goods that are acquired from outside the European Union by accountable persons
are treated as imports

Therefore, as and from 1st January 2021, goods purchased from Great Britain and brought into Ireland will be treated as imports.

Postponed Accounting arrangements enable an accountable person to self-account
for VAT on imports on their VAT return so that import VAT may, subject to the usual
rules on deductibility, be reclaimed at the same time as it is declared on a VAT
return.

This will be a straightforward reverse charge transaction, without the need
to pay the import VAT at the point of importation.

In other words, it will be recorded in the VAT return as VAT which is simultaneously deducted on a ‘purchase’
and charged on a ‘sale’ in a similar way to the manner in which intra- community
acquisitions are currently recorded on the return.

The VAT 3 has been amended to include an additional field/box PA1 to capture the
value of goods imported under Postponed Accounting (net plus carriage, insurance
and freight). The VAT is then accounted for at T1 and T2 (subject to the usual rules
of deductibility). The Return of Trading details will also be amended.

The use of Postponed Accounting is intended to alleviate cash flow issues which
could arise following the departure of the UK from the EU, where VAT registered
businesses may otherwise have to pay import VAT at the point of importation of
goods and then recover the VAT when the next VAT return is filed.

Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie