Postponed VAT accounting is being introduced from 1 January 2021 for all imports of goods. This means that UK VAT-registered persons will account for the import VAT on goods imported into the UK on their VAT returns, and both pay and recover import VAT on the same VAT return. This measure will apply to goods imported from all countries, both EU and non-EU.
All UK VAT-registered persons who import goods into the UK, especially those smaller businesses that do not already use the current Duty Deferment Scheme.
The new rules will apply from 1 January 2021, i.e. from the end of the transition period (31 December 2020).
This is a welcome measure which mitigates cashflow concerns for businesses that import goods. The government had previously introduced regulations to implement this measure in a no-deal Brexit situation, so it is helpful that the Budget has confirmed postponed VAT accounting will still be implemented.