Introduction

Since leaving the EU on January 31, 2020, the UK transition period has been in affect and ends on December 31, 2020. The post-Brexit phase starts January 1, 2021, which is referred to as "Brexit day" in this document.

When the UK leaves the EU VAT regime, they will be treated like a third country and will themselves need to treat the remaining EU member states as third countries: UK businesses that purchase and sell goods to and from the EU need to treat these goods as third country imports and exports and the goods will have to go through customs.

To help minimise the impact of this change in the UK, the UK Government has introduced several measures. One of the key measures is the introduction of "Postponed VAT accounting" (PVA). Postponed VAT accounting will allow the importer to defer actually paying the import VAT at customs and instead account for the VAT on its subsequent VAT return. The outcome is the same, but the importer avoids having to pay the import VAT upfront.

This guide provides guidelines to manage the Postponed VAT accounting scheme and its consideration in the new post-Brexit VAT returns.