Dear Valued Client
As published, there is a proposed VAT increase of 0.5% applied 1 May 2025 (15.5%). Whilst this is being challenged by some parties, we must at this point assume its implementation and will prepare for the increase to be applied on services (where applicable) and obviously also on Customs VAT. It is noted that the increase is applied on assessment date of the customs entry so all entries processed from 1 May 2025 onwards will have the additional 0.5% applied to import VAT.
Due to shipping line release deadlines, we normally clear shipments berthing before the 6th in the previous month to avoid overstay charges but there may be some consideration in this month to clearing larger shipments berthing later in May, if the shipping lines are able to provide the necessary documentation we require. However, because Customs VAT is claimed back in your VAT cycle, the increase really only effects your funding costs for the time in your VAT cycle and so it is unlikely there will be a financial benefit to early clearance, especially when one considers that SCT would have to raise the invoice in the month of clearance, thereby pulling forward your payment date to SCT by 30 days.
We will carefully examine each entry in our chain and discuss with customers the shipments we believe need consideration for early clearance. We believe that to a large degree maintaining current practices will be the right decision rather than early pre clearances to avoid the 0.5% increase but encourage you to discuss the same with SCT management should you have any concerns.
Should you have any queries, please reach out to our Head Office on 0318180320.