New Forest

13/10/2020

Tariff changes & key VAT issues at the border from 1 January 2021

What tariffs apply from 1 January?

From 1 January 2021, there will be new rates of Customs Duty for imports – called the UK Global Tariff.

The Tariff rates for transactions with the EU will depend upon whether or not a deal is reached. For example, if there is no deal with the EU the Tariff on motor cars will be 10%, so many car dealers are suggesting that business should consider acquiring a new vehicle before 1 January. To check the tariffs that will apply to goods you import, go to www.gov.uk/guidance/uk-tariffs-from-1-january-2021

Key VAT issues at the border

Businesses will need to decide how they will account for import VAT when they make a customs declaration. From 1 January 2021, businesses will be able to use postponed VAT accounting to account for import VAT on their VAT Return for goods imported from anywhere in the world.

They will also need to check if Import VAT is due at the border.  Import VAT will not be due at the border if goods in a consignment do not exceed £135 in value. The only exceptions will be excise goods and gifts.

Imports of goods subject to controls

Most traders with a good compliance record will be able to defer import declarations on most goods for up to 6 months after 1 January 2021 depending on the nature of the goods.

For further information on the changes to tariffs, VAT and controls on goods due to Brexit, please contact Alan Rolfe on 023 8046 1235.

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