The Customs and Value Added Tax (Managed Transition Procedure) (EU Exit) Regulations 2021

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations make appropriate transitory provision relating to customs and value added tax in consequence of, or otherwise in connection with, the withdrawal of the United Kingdom from the EU.

Part 1 provides for citation and commencement.

Part 2 amends the Customs (Managed Transition Procedure) (EU Exit) Regulations 2019 (S.I. 2019/487) (“Managed Transition Regulations”) to extend the period in which the Managed Transition Regulations apply (and thereby to extend the period during which the existing powers to make public notices under the Managed Transition Regulations may be exercised) for a further 12 months (subject to any provision in regulations providing for them to cease to have effect on an earlier date). The Managed Transition Regulations will now cease to have effect at the end of the period of 24 months beginning with IP completion day.

Part 3 sets out how an eligible person making a Customs declaration for the free-circulation procedure by conduct specified in a public notice under regulation 4 of the Managed Transition Regulations is to account for import VAT in respect of relevant importations. The terms “eligible person” and “relevant importation” are defined terms (see regulations 3 and 6).

Regulation 7 provides that a person to whom Part 3 of these Regulations applies is to account for import VAT on relevant importations on the return the person is required to make for the prescribed accounting period in which the liability for import VAT is incurred.

Regulation 8 provides that regulations 8 (interest in cases of official error) (modified as stated) and 10(1)(a) and (2) (appeals) of the Value Added Tax (Accounting Procedures for Import VAT for VAT Registered Persons and Amendment) (EU Exit) Regulations 2019 (S.I. 2019/60) apply where Part 3 of these Regulations applies.

Regulation 9 provides that regulations 28 (estimation of output tax), 29(3) (claims for input tax), 32(3)(baa) (the VAT account) and 40(1)(ba) (VAT to be accounted for on returns and payment of VAT) of the Value Added Tax Regulations 1995 (S.I. 1995/2518) apply with the stated modifications where Part 3 of these Regulations applies.

Any notices that are made under the Managed Transition Regulations will be published at: https://www.gov.uk/government/collections/customs-vat-and-excise-uk-transition-legislation-from-1-january-2021. A person unable to access the notices electronically may access them in hard copy by post free of charge on application to 0300 322 9434.

A Tax Information and Impact Note covering this instrument will be published on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins.