Skip to main content

Potential upfront VAT payments after Brexit

9 January 2018

Nicky Morgan writes to HMRC about potential upfront VAT payments after Brexit.

 The Taxation (Cross-Border Trade) Bill

  • The Taxation (Cross-Border Trade) Bill was debated in Parliament yesterday. The Bill could force firms to pay VAT upfront on goods imported from the EU.
  • The British Retail Consortium (BRC) has said that the changes could create additional cashflow burdens for 130,000 companies. They have warned that the processing time at ports and border entry points attached to the customs process could increase.
  • Rt Hon. Nicky Morgan MP, Chair of the Treasury Committee, has written to Jon Thompson, Chief Executive and Permanent Secretary of HMRC, to seek clarification on the proposed new rules.

Chair's comments

Commenting on the correspondence, Mrs Morgan said:

"As the reality of Brexit begins to bite, its implications on tax are yet to be fully explored.

"Under the Taxation (Cross-Border Trade) Bill, firms would have to pay VAT upfront on goods imported from the EU before they can be released into free circulation in the UK.

"The Government has already acknowledged that this would create an additional burden for businesses, and Autumn Budget 2017 committed to ‘look at options to mitigate any cash-flow impacts.' "

"I have written to HMRC to seek clarification on the costs to businesses and consumers arising from this legislation, the options being considered to mitigate these costs, and the likelihood of the UK participating in the EU VAT area as part of its end-state relationship with the EU."

Further information

Image: iStockphoto