The Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019

Statutory Instruments

2019 No. 60

Exiting The European Union

Value Added Tax

The Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019

Made

21st January 2019

Laid before the House of Commons

22nd January 2019

Coming into force in accordance with regulation 1.

The Treasury in exercise of the powers conferred by sections 51(1)(a), 52(2) and 56(1) of the Taxation (Cross-border Trade) Act 2018 M1 make the following Regulations.

In accordance with section 51(1)(a) of the Taxation (Cross-border Trade) Act 2018, the Treasury consider it appropriate in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the EU, to make the following provision in relation to value added tax.

In accordance with section 52(2) of the Taxation (Cross-border Trade) Act 2018, the Treasury consider it appropriate in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the EU, for the following Regulations to come into force on such day as the Treasury may by regulations under section 52 of that Act appoint.

In accordance with section 56(1) of the Taxation (Cross-border Trade) Act 2018, the Treasury consider it appropriate to make the following provision in consequence of that Act.

Marginal Citations

M1 2018 c. 22; section 51(1)(a) permits “the appropriate Minister” to make provision relating to value added tax and under section 51(4)(b) “the appropriate Minister” means the Treasury; section 56(1) permits “the appropriate Minister” to make provision in consequence of the Act and under section 56(5)(b) “the appropriate Minister” means the Treasury.

Citation and commencement U.K.

1.  These Regulations may be cited as the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019 and come into force on such day as the Treasury may by regulations under section 52 of the Taxation (Cross-border) Trade Act 2018 appoint.

Commencement Information

I1 Reg. 1 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Interpretation U.K.

2.  In these Regulations-

“the Act” means the Value Added Tax Act 1994 M2 ;

“the Commissioners” means the Commissioners for Her Majesty's Revenue and Customs;

[F1 “import VAT” means value added tax chargeable by virtue of section 1(1)(c) of the Act but not pursuant to any other provision by or under that Act;]

“prescribed accounting period” has the meaning given by section 25(1) M3 of the Act (payment by reference to accounting periods and credit for input tax against output tax);

“registered person” means a person registered under Schedule 1, 1A or 3A to the Act M4 ;

[F2 “relevant goods” means goods imported into the United Kingdom by a registered person which are used or to be used for the purposes of any business carried on by the registered person, but does not include goods which are the subject of a declaration by a qualifying traveller within the meaning of regulation 39B of the Customs (Import Duty) (EU Exit) Regulations 2018;]

“return” means a return which is required to be made in accordance with regulation 25 of the VAT Regulations 1995 M5 ;

“TCTA 2018” means the Taxation (Cross-border Trade) Act 2018;

“tribunal” has the meaning given by section 82 of the Act M6 ;

[F3 “Union customs legislation” has the meaning given by paragraph 1(8) of Schedule 9ZB to the Act;]

“VAT registration number” means the number allocated by the Commissioners to a person for the purposes of registration under Schedule 1, 1A or 3A of the Act.

Textual Amendments

F1 Words in reg. 2 substituted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(2)(a) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

F2 Words in reg. 2 substituted (31.12.2020) by The Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (S.I. 2020/1495), regs. 1(2), 20(2); S.I. 2020/1641, reg. 2, Sch.

F3 Words in reg. 2 inserted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(2)(b) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I2 Reg. 2 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Marginal Citations

M2 1994 c. 23.

M3 Section 25(1) was amended by paragraph 25 of Schedule 8 to TCTA 2018 but that amendment is not yet in force.

M4 Schedule 1A was inserted by section 203 of, and paragraph 1 of Schedule 28 to, the Finance Act 2012 (c. 14). Schedule 3A was inserted by section 136(8) of, and Schedule 38 to, the Finance Act 2000 (c. 17). Schedule 1 was amended by paragraph 81 of Schedule 8 to TCTA 2018. Schedule 1A was amended by paragraph 82 of Schedule 8 to TCTA 2018. Schedule 3A was amended by paragraph 85 of Schedule 8 to TCTA 2018. The amendments made by TCTA 2018 are not yet in force.

M5 S.I. 1995/2518. Relevant amending instruments are S.I. 2012/1899, S.I. 2000/794, S.I. 2009/2978 and 2019/59.

M6 Section 82 was substituted by S.I. 2009/56.

Application of these Regulations U.K.

3.—(1) These Regulations apply to a registered person who is liable for import VAT on relevant goods [F4 (but this is subject to Part 2 of the Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020)].

[F5 (1A) These regulations do not apply to a person who is treated as having imported goods for the purposes of paragraph 4(2) of Schedule 9ZC to the Act.]

(2) A person to whom these Regulations apply (P) may have those relevant goods delivered or removed without payment of the VAT chargeable on the importation and may instead account for that VAT in accordance with these Regulations.

(3) The effect of section 16(2) of the Act (application of customs enactments) M7 is modified to the extent that these Regulations make different provision for accounting for import VAT on relevant goods.

Textual Amendments

F4 Words in reg. 3(1) inserted (31.12.2020) by The Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (S.I. 2020/1495), regs. 1(2), 20(3); S.I. 2020/1641, reg. 2, Sch.

F5 Reg. 3(1A) inserted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(3) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I3 Reg. 3 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Marginal Citations

M7 Section 16 was substituted by paragraph 13 of Schedule 8 to the TCTA 2018 but that substitution is not yet in force.

Accounting for import VAT U.K.

4.  Subject to regulation 9, P may account for import VAT on relevant goods on the return P is required to make for the prescribed accounting period in which the liability to the import VAT on those goods is incurred if the conditions set out in regulation 5 are met.

Commencement Information

I4 Reg. 4 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

5.—(1) Where the relevant goods are declared for the free-circulation procedure for the purposes of Part 1 of TCTA 2018, P's VAT registration number must be shown on that declaration; and

(2) Where the relevant goods are declared for a special customs procedure for the purposes of Part 1 of TCTA 2018, P must in relation to those goods comply with any conditions imposed by or under Part 1 of TCTA 2018 so far as relating to the special customs procedure for which those goods were declared.

[F6 (3) Where the relevant goods are declared for the free circulation procedure for the purposes of Union customs legislation, P's VAT registration number must be shown on that declaration; and

(4) Where the relevant goods are declared for a special procedure for the purposes of Union customs legislation P must in relation to those goods comply with any conditions imposed by or under the Union customs legislation so far as relating to the special procedure for which those goods were declared.]

Textual Amendments

F6 Reg. 5(3)(4) inserted (31.12.2020) by The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(4) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I5 Reg. 5 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

6.  P is required, and is presumed to be so required, for the purposes of the Act, to account for import VAT on relevant goods in accordance with these Regulations if, by the last day on which P is required to furnish a return for a prescribed accounting period in which liability to import VAT on those goods is incurred, P has not otherwise accounted for the import VAT.

Commencement Information

I6 Reg. 6 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Estimation of import VAT U.K.

7.  Regulation 28 of the Value Added Tax Regulations 1995 M8 (estimation of output tax) applies for the purpose of these Regulations as if the reference to “output tax” in that regulation includes import VAT chargeable on the importation of relevant goods.

Commencement Information

I7 Reg. 7 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Marginal Citations

M8 S.I. 1995/2518.

[F7 Correction of errors U.K.

7A.   Regulation 34 of the Value Added Tax Regulations 1995 (correction of errors) applies for the purposes of these Regulations as if the references to “output tax” in that regulation include import VAT chargeable on the importation of relevant goods.]

Textual Amendments

F7 Reg. 7A inserted (with effect in accordance with reg. 58 of the amending S.I.) by The Value Added Tax (Amendment) (EU Exit) Regulations 2021 (S.I. 2021/715), regs. 1, 57

Interest in cases of official error U.K.

F8 8.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 Reg. 8 omitted (with effect in accordance with art. 1(3)(b) of the amending S.I.) by virtue of The Finance Act 2009, Sections 101 and 102 (Value Added Tax) (Late Payment Interest and Repayment Interest) (Exceptions and Consequential Amendments) Order 2022 (S.I. 2022/1298), arts. 1(3)(a), 7(2)

Withdrawal of the option of a registered person to account for and pay import VAT under these Regulations U.K.

9.—(1) The Commissioners may direct that a registered person may not account for and pay import VAT as provided for in these Regulations where they consider it necessary to do so for the protection of the revenue.

(2) A direction of the Commissioners under this Regulation must be given by notice in writing to the registered person and takes effect from a date not earlier than the date of the direction.

Commencement Information

I8 Reg. 9 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Appeals U.K.

10.—(1) An appeal lies to a tribunal with respect to any of the following—

F9 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) a direction of the Commissioners under regulation 9.

(2) Part 5 of the Act (reviews and appeals), and any order or regulations made under that Part, have effect as if an appeal under this regulation were an appeal which lies to the tribunal under section 83(1) of the Act (but not under any particular paragraph of that subsection).

Textual Amendments

F9 Reg. 10(1)(a) omitted (with effect in accordance with art. 1(3)(b) of the amending S.I.) by virtue of The Finance Act 2009, Sections 101 and 102 (Value Added Tax) (Late Payment Interest and Repayment Interest) (Exceptions and Consequential Amendments) Order 2022 (S.I. 2022/1298), arts. 1(3)(a), 7(3)

Modifications etc. (not altering text)

C1 Reg. 10 applied in part (31.12.2020) by The Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (S.I. 2020/1495), regs. 1(2), 8(b) (with reg. 4); S.I. 2020/1641, reg. 2, Sch.

C2 Reg. 10 applied in part (31.12.2021) by The Customs and Value Added Tax (Managed Transition Procedure) (EU Exit) Regulations 2021 (S.I. 2021/1375), regs. 1, 8(b) (with reg. 4)

Commencement Information

I9 Reg. 10 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

11.  Where an appeal is against a direction of the Commissioners under regulation 9 the tribunal must not allow the appeal unless it considers that the Commissioners could not reasonably have been satisfied that there were grounds for the direction.

Commencement Information

I10 Reg. 11 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Amendments to the Value Added Tax Regulations 1995 U.K.

12.—(1) The Value Added Tax Regulations 1995 M9 are amended as follows.

(2) In regulation 2(1) omit the definitions of “datapost packet”, “post office”, “postal packet” and “universal service provider”;

(3) In regulation 32—

F10 (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) insert at the appropriate place in paragraph (3) “ (baa) a total of the import VAT which the taxable person is accounting for on his return for that period in accordance with the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019 [F11 , ]”;

(4) In regulation 39—

[F12 (a) in paragraph (2), omit “, except that the total of the output tax due” to the end except for the final full stop; and]

F13 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5) In regulation 40(1) —

(a) at the appropriate place insert “ (ba) all import VAT for which he is accounting on that return in accordance with the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019 ”; and

F14 (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6) Omit regulation 122.

Textual Amendments

F10 Reg. 12(3)(a) omitted (31.12.2020) by virtue of The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(5) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

F11 Reg. 12(3)(b): comma substituted for full stop (31.12.2020) by The Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (S.I. 2020/1495), regs. 1(2), 20(4)(a); S.I. 2020/1641, reg. 2, Sch.

F12 Reg. 12(4)(a) substituted (31.12.2020) by The Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (S.I. 2020/1495), regs. 1(2), 20(4)(b); S.I. 2020/1641, reg. 2, Sch.

F13 Reg. 12(4)(b) omitted (31.12.2020) by virtue of The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(5) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

F14 Reg. 12(5)(b) omitted (31.12.2020) by virtue of The Value Added Tax (Miscellaneous Amendments, Northern Ireland Protocol and Savings and Transitional Provisions) (EU Exit) Regulations 2020 (S.I. 2020/1545), regs. 1, 105(5) (with regs. 109-131); S.I. 2020/1641, reg. 2, Sch.

Commencement Information

I11 Reg. 12 in force at 31.12.2020 by S.I. 2020/1641, reg. 2, Sch.

Marginal Citations

M9 S.I. 1995/2518. Regulation 2 was amended by paragraph 23 of Schedule 8 to the Postal Services Act 2000 (c. 26). Other relevant amending instruments are S.I. 1996/1250, S.I. 2007/1418, S.I. 2011/2085 and S.I. 2019/59.

Rebecca Harris

Craig Whittaker

Two of the Lords Commissioners of Her Majesty's Treasury

Explanatory Note

(This note is not part of the Regulations)

These Regulations are made in exercise of the power in sections 51(1)(a), 52(2) and 56(1) of the Taxation (Cross-border Trade Act 2018 (c. 22) (“TCTA 2018”) in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the European Union and in consequence of TCTA 2018. They are to come into force on such day as the Treasury by regulations may appoint.

The Regulations make provision in relation to accounting and payment for import VAT on the importation of goods by persons registered for VAT.

Regulation 1 provides for commencement and regulation 2 lists definitions used in the Regulations.

Regulation 3 provides that a person registered for VAT and liable to pay import VAT on relevant imported goods may have any such goods delivered or removed without payment of import VAT where that person accounts for the import VAT under the Regulations. This regulation also modifies the application of section 16(2) of the Value Added Tax Act 1994 (“VATA”) (which provides for import VAT on the importation of goods to be charged and payable as if it were import duty within Part 1 of TCTA 2018).

Regulation 4 provides that a person registered for VAT and choosing to account for import VAT under these Regulations may do so on the return that person is required to make for a prescribed accounting period provided that the conditions in regulation 5 are met.

Regulation 5 sets out the conditions to be met for the application of regulation 4. A registered person's value added tax registration number must be shown on a declaration for the free circulation procedure that that person makes on the importation of goods in accordance with Part 1 of TCTA 2018. Where relevant goods are declared for a special customs procedure, the registered person must comply with requirements imposed by or under that Part.

Regulation 6 provides that a person to whom the Regulations apply is required to account for import VAT on the person's return for a prescribed accounting period if the person has not otherwise accounted for it by the due date for furnishing that return, and is presumed to be so required for the purposes of VATA.

Regulations 7 and 8 modify respectively the application of regulation 28 of the VAT Regulations 1995 (S.I. 1995/2518) (“the Principal Regulations”) and section 78 of VATA for the purposes of the Regulations.

Regulation 9 allows Her Majesty's Revenue and Customs (“HMRC”) to direct that a person registered for VAT may not account for and pay import VAT under the Regulations if they consider it necessary to do so for the protection of the revenue. Such a direction must be notified in writing and takes effect from a day not earlier than the date of the direction.

Regulations 10 and 11 provide for a right of appeal to the tribunal against a decision of HMRC made under regulation 8 or 9 and applies Part 5 of VATA (“Reviews and Appeals”) for the purposes of the Regulations.

Regulation 12 amends and omits certain provisions in the Principal Regulations.

This instrument will be covered by an overarching HMRC impact assessment (second edition) which will be published and available on the website https://www.gov.uk/government/collections/customs-vat-and-excise-regulations-leaving-the-eu-with-no-deal.