Alison Horner, Indirect Tax Partner at MHA MacIntyre Hudson, explains the steps businesses need to take to benefit from HMRC’s extension of ‘time to pay’ support on import VAT and duty.
“While the VAT and duty incurred on imports isn’t covered by HMRC’s recently-announced VAT deferral arrangement, it has opened a time to pay agreement option for certain businesses. It’s important for businesses to understand whether they’re eligible, and how to ensure they follow the correct processes to qualify.
“Any business with an existing Duty Deferment Account, where import duties are paid by one monthly direct debit rather than on each consignment, is eligible to apply for time to pay if they don’t believe they will be able to make the necessary payments – and can discuss this with HMRC via the COVID-19 helpline. It’s important to note at this stage that HMRC is considering this support on a monthly basis during the pandemic. Companies shouldn’t assume they’re entitled to ongoing support after initial acceptance – and must not cancel their direct debits, as these are a fundamental part of their Duty Deferment Account agreement with HMRC.
“Any eligible businesses needs to review their planned imports to understand their potential customs duty, and act in advance to ensure goods have the necessary customs clearance – to avoid them being held at ports. Negotiating time with HMRC to establish arrangements to collect the funds will be crucial.”