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News & Knowledge

Import/Export: Customs Tariffs, Duties and VAT

23rd November 2020

As the date for leaving the EU, and arguably leaving without a ‘deal’, gets ever closer, it is important for businesses to understand what implications this has for them from a VAT and Indirect Taxes perspective. MSI's Northern UK accounting member Armstrong Watson provides this update.


Arguably the biggest change for businesses arising from Brexit is that all arrivals and departures of goods to and from the UK will become ‘imports’ and ‘exports’ from a VAT and Customs Duty perspective. Currently, only goods whose origin or destination is outside the EU are considered “imports” or “exports”. The importance of this distinction is that imports attract Import VAT – which is recoverable subject to the usual rules on VAT recovery – and Customs Duty, which is not recoverable. Crucially, as the Duty is not recoverable this will unfortunately represent an additional cost of doing the same business.

Customs Duty

As Customs Duty is an absolute cost, it will be very important to assess the type of goods arriving and categorise them correctly – as this will drive the rate of Duty – and also understand how to correctly value imports for Duty purposes and take advantage of any Duty reliefs. Equally important, as hold-ups at borders could be commercially extremely damaging, is exploring any possible deferment options, which allow goods to move freely with the Duty paid retrospectively. Businesses may also wish to assess their supply chains in order to understand whether creating a business presence in the EU may be beneficial in mitigating these increased absolute financial and administrative commitments.


Additionally, businesses will no longer be able to use the UK’s Mini One Stop Shop (“MOSS”) portal to report and pay VAT on sales of digital services to consumers in the EU. Instead, businesses that wish to continue to use MOSS accounting will be required to register for the VAT MOSS non-Union scheme in an EU Member State, which brings with it further.

Brexit will clearly bring many new challenges to businesses and we are encouraging all of our clients and local businesses to reach out for support which we would be delighted to provide.


For further information and assistance contact our member firm Armstrong Watson (UK) >>

About Armstrong Watson - Carlisle

Armstrong Watson has been advising and protecting clients across the North of England and Scotland since 1867. With 16 regional offices from Glasgow to Leeds, 38 partners and over 400 colleagues, we’re focused enough to provide a truly tailored service and large and experienced enough to work alongside any size of business, delivering a complete remit of services equal to top tier firms.

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