§ Mr. Dorrellasked the Chancellor of the Exchequer what action he intends to take to implement his Budget proposal to change the system for collecting value added tax on imports; and whether he will make a statement.
§ Mr. HayhoeThe Budget proposal to charge VAT on imports by withdrawing the system of postponed accounting will be given effect by regulations made by the Commissioners of Customs and Excise under powers in338W the Value Added Tax Act 1983. These regulations have now been made and are being laid before the House today. They are subject to the negative procedure.
The regulations withdraw the facility for postponed accounting for VAT on imported goods and goods removed from warehouse, which at present allows registered taxable persons to account for the tax on a VAT return instead of paying it at the place of importation or on removal.
The regulations also make certain consequential changes. VAT will be excluded from the relief from customs duty which is afforded by the inward processing provisions. VAT relief for goods temporarily imported will be confined to importations by persons not registered for VAT. There will, however, be a relief to prevent a further VAT charge on re-imported goods, provided certain conditions are met. And postponed accounting will continue in force for certain postal importations.
The changes under these regulations will take effect from 1 October 1984.