- Many UK businesses face a significant VAT risk when importing goods for processing, repair, or servicing.
- This risk is often unnoticed until it is too late, with a potentially devastating financial impact.
- Post-Brexit, businesses are confident in their import processes but may overlook this hidden risk.
- Importers may not fully understand how import VAT applies, especially those exposed to customs processes due to Brexit.
- Import VAT can only be claimed by the owner of the goods, not by processors who import goods they do not own.
- This policy change by HMRC since July 2019 can lead to an additional cost of 20 percent of the customs duty value.
- The financial impact can turn profitable contracts into loss-making ones.
- Businesses should assess their risk and explore options to protect themselves from this VAT trap.
Source: mha.co.uk
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
