Import free duty and VAT during COVID-19 crisis

The announcement that the government is to suspend import duty on Personal Protection Equipment (PPE) and chemicals for test kit manufacture is welcome but overdue, says leading tax and advisory firm, Blick Rothenberg.

Simon Sutcliffe, a partner at the firm said: ‘The government announced this morning that duty is to be suspended on all imports of PPE and chemicals for test kit manufacture by a simple adjustment to codes on the import entry.

‘This is a practical step instead of licence and import controls.There is trouble however, as countries stockpile PPE and place export restrictions upon much of the equipment to the dismay of the WCO and WTO.

He added: ‘The UK government has also announced that all public authorities and those that supply them can now import free of duty and VAT certain general goods used in the current crisis including certain types of chemicals, textiles, articles containing plastic and rubber (such as tubes, rubber aprons, gloves, face shields etc.)

‘Although this is helpful in reducing costs to public bodies and their suppliers this action could have been agreed earlier by the EU. As the UK is still in the EU Customs Union (until 31st December and bound by its rule) and the majority of all duty is remitted back to the EU.

‘It is surprising that it has taken this long for all member states to approve this suspension of duty on these products; given how far ahead mainland Europe is in terms of virus casualties.

He added: ‘HMG has also eased the restrictions on producing and transferring certain types of denatured alcohol to allow current producers of sanitising chemicals to further increase production but also allow other holders of alcohol to transfer it to the production of these types of goods.

‘For example, gin distillers can now use their ethanol to produce these sanitizers and transfer production and stocks. Excise duty is a domestic tax and not controlled by central EU administration.

‘Therefore, the UK has been able to move much more quickly, and, to its credit, it has. Record-keeping is still required but it allows stocks of appropriate alcohol to be used more effectively to produce much needed sanitising products.

Simon added: ‘The current US administration is considering deferring all customs duties on imports to assist business in terms of cash flow and easing the global supply chain costs of moving goods internationally.

‘Surely, now this is something the EU must consider centrally beyond the existing limited pre-authorised deferral regime to further assist hard-hit UK/EU firms.’

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