Post-Brexit import VAT - possible solutions

One post-Brexit tax issue that has been in the headlines this last week is the possible imposition of import VAT on EU imports.  The point emerged in the notes to the Taxation (Cross-border Trade) Bill and the potential cash flow effect for UK businesses was highlighted in a letter from Nicky Morgan MP, chair of the Treasury Select Committee, to HMRC.

There must be several ways of mitigating this.  Even if the Government rules out the UK remaining in the EU VAT area, one option would be to defer the VAT charge so that it is effectively charged in a subsequent VAT return (in much the same way as some cross-border supplies of services are reverse-charged under existing rules).  There would be little or no Exchequer effect of such a proposal if it were limited to EU imports.  A more radical - and perhaps administratively simpler - proposal would be to extend the same approach to all imports (EU and non-EU).