PART 1 Preliminary

Citation and commencement

1. These Regulations may be cited as the Customs and Value Added Tax (Managed Transition Procedure) (EU Exit) Regulations 2021 and come into force on 31st December 2021.

PART 2 Extension of period in which the Customs (Managed Transition Procedure) (EU Exit) Regulations 2019 apply

Amendment of the Customs (Managed Transition Procedure) (EU Exit) Regulations 2019

2. —(1)The Customs (Managed Transition Procedure) (EU Exit) Regulations 2019( 2 ) are amended as follows.

(2) In regulation 1 (citation, commencement and effect), for “12” substitute “24” in each place it occurs.

PART 3 Accounting for import VAT by VAT registered persons making customs declarations by conduct

Interpretation

3. In this Part—

“ Commissioners ” means HMRC Commissioners( 3 );

“ eligible person ” has the meaning given by regulation 3(2) of the Customs (Managed Transition Procedure) (EU Exit) Regulations 2019( 4 );

“ import VAT ” means value added tax chargeable by virtue of section 1(1)(c)( 5 ) of VATA 1994;

“ prescribed accounting period ” has the meaning given by section 25(1)( 6 ) of VATA 1994;

“ registered for VAT ” refers to registration under Schedule 1( 7 ) or 3A( 8 ) to VATA 1994;

“ relevant importation ” has the meaning given in regulation 6;

“ VATA 1994 ” means the Value Added Tax Act 1994.

Application

4. This Part applies in any case where—

(a) Part 2 of the Customs (Managed Transition Procedure) (EU Exit) Regulations 2019 applies,

(b) the eligible person is registered, or required to be registered, for VAT, and

(c) the eligible person, or an individual on behalf of the eligible person, declares the goods by conduct for the free-circulation procedure in accordance with regulation 4 of those Regulations.

Obligation to account for and pay import VAT in accordance with this Part

5. —(1) An eligible person (P) must account for and pay import VAT on goods which comprise a relevant importation in accordance with the provision made by this Part.

(2) The effect of section 16(2) of VATA 1994 (application of customs enactments)( 9 ) is modified to the extent that this Part makes different provision for accounting for import VAT, including the timing of such accounting, on a relevant importation.

Relevant importation

6. A “relevant importation” is an importation of goods into the United Kingdom where the goods are—

(a) chargeable with import VAT for which P is liable,

(b) used or to be used by P for the purposes of a business P carries on, and

(c) required to be declared for the free-circulation procedure( 10 ) under Part 1 (import duty) of the Taxation (Cross-border Trade) Act 2018.

Obligation to account for import VAT on VAT return

7. P must account for and pay the import VAT on goods which comprise a relevant importation on the return that P is required to make for the prescribed accounting period in which the liability for the import VAT is incurred.

Application with modifications of the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019

8. The following provisions of the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019( 11 ) apply for the purposes of this Part with, where applicable, the stated modification—

(a) regulation 8 (interest in cases of official error) applies as if the reference to the importation of relevant goods were a reference to a relevant importation;

(b) regulation 10(1)(a) and (2) (appeals).

Modification of the Value Added Tax Regulations 1995 where this Part applies

9. Where this Part applies the following provisions of the Value Added Tax Regulations 1995( 12 ) apply with the stated modifications—

(a) regulation 28 (estimation of output tax) is to be read as if—

(i) the reference to “ output tax ” includes import VAT chargeable on goods comprising a relevant importation; and

(ii) the words from “in the next prescribed accounting period” to the end were “in the prescribed accounting period in which the Commissioners make available to the person details of the amount of import duty due from the person on goods comprising a relevant importation (and “ import duty ” in this regulation means import duty charged under section 1 of the Taxation (Cross-border Trade) Act 2018).”;

(b) regulation 29(3) (claims for input tax) is to be read as if the words from “in the next prescribed accounting period” to the end were “in the prescribed accounting period in which the Commissioners make available to the person details of the amount of import duty due from the person in that prescribed accounting period on goods comprising a relevant importation (and “ import duty ” in this regulation means import duty charged under section 1 of the Taxation (Cross-border Trade) Act 2018).”;

(c) regulation 32(3)(baa) (the VAT account) and regulation 40(1)(ba) (VAT to be accounted for on returns and payment of VAT) are to be read as if after “2019,” were added “or Part 3 of the Customs and Value Added Tax (Managed Transition Procedure) (EU Exit) Regulations 2021,” .