Thursday, 11 July 2019
Department of Finance
As part of the contingency measures taken by the Government for a 'no deal' Brexit, I announced the introduction of a system of postponed accounting for VAT purposes to alleviate the cash flow burden on business. The Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2019 Act provides for the introduction of postponed accounting for VAT registered traders importing goods from non-EU countries, which will be implemented if the UK leaves the EU without a withdrawal agreement. The Act has been enacted and remains subject to commencement, until it is clear that the UK are exiting without an agreement.
Under the system of postponed accounting, importers will not pay import VAT at the point of entry, instead, importers will account for import VAT through their bi-monthly VAT return. The VAT will therefore be reclaimed at the same time as it is declared in the VAT return.
In a 'no deal' scenario, postponed accounting will be introduced for all traders for a limited period to alleviate immediate cash flow issues. Following an initial period, at a time to be decided by the Minister for Finance, continued use of the postponed accounting system will depend on fulfilling criteria which will be set by the Revenue Commissioners.The system of postponed accounting will not be mandatory and those traders who wish to pay VAT at point of entry, may continue to do so.
In the event of a no deal exit, exports to the UK will continue to be zero rated.