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VAT changes for imports and exports in 2021

16 November 2020

Brexit

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Our latest update on the changes for VAT imports and exports have been listed below.

European Sales List (ESL)

Requirement to submit ends, so last return is Q4 of 2020.

Intrastat Supplementary Declarations for Despatches to EU

Requirement to submit ends, so last return ends on 31/12/2020

Intrastat Supplementary Declarations for Arrivals from EU

Requirement to submit ends on 30/6/2021, so returns required for the first 6 months of 2021.

How to apply for postponed accounting for import VAT in 2021.

Inform your freight agent(s) that you wish to take advantage of postponed accounting, and ask them to quote “G” in box 47e of each import entry made via CHIEF, or if the agent uses the new CDS system to declare the entry, quote your VAT registration number at header level in data element 3/40.

Postponed accounting does not apply for imported goods with a value less than £ 135.  A new scheme will apply from 1/1/2021 where supply VAT is due either from the Online Marketplace or the overseas seller who has to register for VAT in the UK.

VAT returns for imported goods in 2021

If importer has taken advantage of the new postponed accounting system, no import VAT is paid at the time of import (or removal from a bonded duty free warehouse).  The paper monthly C79 certificate is to be replaced by an online system, but further details are yet to be released.

Net value of purchase in box 7

Pay import VAT in box 1 (if the goods are standard rated in the UK)

Claim input tax in box 4 (if the goods are standard rated in the UK and used for business purposes).

VAT returns for purchase of services from overseas

No change to current procedure, account for Reverse Charge (RC) in boxes 1 and 4 of the UK VAT return, unless the services are outside the RC system (transport, hotels, land related services, catering, and VAT exempt services such as finance fees).

VAT return boxes to be nil

Box 2 (Acquisition tax)

Box 8 (sales of goods to the EU)

Box 9 (purchase of goods from the EU)

Quarterly VAT returns that span 2020 and 2021

Remember to apply the two different procedures within the same VAT return, as a one-off measure.  Subsequent VAT returns will have a single procedure.

If your quarterly return ends in January or February 2021, you will have a mixture of different procedures.