Clarity over VAT on transactions spanning 31 December
30 December: HMRC has published guidance on the VAT treatment of transactions that are ongoing and goods that are in transit between Great Britain and the EU when the Brexit transition period ends on 31 December 2020.
Published on 23 December, the public notice outlines provisions in relation to VAT at the end of the transition period.
The guidance focuses primarily on goods that are in transit between the EU and Great Britain at that time, but also provides information on call-off stock and for fulfilment houses storing goods imported before the end of the transition period.
It also covers VAT treatment of certain supplies of financial services and other services between the UK and EU.
The notice, parts of which have the force of law, confirms that goods received in Great Britain on or after 1 January 2021 will be subject to UK customs procedures and import duties, including import VAT.
It provides guidance for organisations on a range of scenarios, including where acquisition VAT was paid ahead of the receipt of goods and where goods were received ahead of the end of the transition, but where acquisition VAT is not due until afterwards.
For further details please visit https://www.icaew.com/insights/tax-news/2020/dec-2020/clarity-over-vat-on-transactions-spanning-31-december