Importance of postponed accounting

The government has confirmed it recognises the importance of postponed accounting for VAT for businesses that import goods from the EU because it gives them a cashflow advantage.

In a statement on page 38 of the Budget red book the government promises to ‘take this into account when considering potential changes following EU exit’.

The Chartered Institute of Taxation welcomed the statement but said there was no certainty that postponed accounting would be HMRC’s preferred approach when the UK leaves the EU.

Alan McLintock chair of the CIOT’s indirect taxes subcommittee said: ‘Continuing postponed accounting after Brexit would avoid a huge strain on businesses’ cashflow and ease their administration work especially as it is estimated that around 180 000 business will have to deal with customs declarations that they have not had to do before once we leave the EU.

‘It will help cut the cashflow impact on...