At the moment, VAT registered importers in the UK can import goods from any EU country and delay paying any VAT until a later date. However when the UK leaves the EU, UK importers may have to pay VAT at the point of entry at the same time as customs duties are paid. The importers may be able to claim this VAT back at a later date but this dramatic change in practice is likely to cause serious cash flow issues and added administration for traders. Furthermore it could cause extra processing time at ports and border entry points which is not desirable.

Conversely Irish traders who import goods from the UK will face a similar problem as any goods will be treated as coming from a country outside of the EU and under current VAT legislation, import VAT must be paid at the time the goods enter the country rather than on the next VAT return. Chartered Accountants Ireland has been calling on the Irish Government to introduce the postponed method of accounting for VAT on Brexit which will have the effect of postponing any VAT charge until the next VAT return filing date. Several EU countries with land borders with countries outside the EU have introduced this method to alleviate the cash flow issues it brings. Read more about this in our submission to the Minister for Finance available on our website www.charteredaccountants.ie.