The Chancellor is coming under pressure from importers to throw them a crucial cashflow lifeline.
The Institute of Export & International Trade (IOE&IT), which grew out of a forerunner of the CBI in the 1930s, has called on Rushi Sunak to let companies defer the payment of taxes on the goods they import to help ease their cashflow.
It wants duty, excise and value-added tax (VAT) on imports to be included in the business support measures Sunak has already unveiled.
The Treasury excluded VAT payments on imports – which are due when goods arrive in the UK – from the emergency deferments unveiled so far. Although VAT can be claimed back, the institute said that the delay from the time of import until the date of refund can place a cashflow strain on the importer.
Marco Forgione, director general of the IOE&IT, said: “At this time, businesses importing goods need all the help available to keep operating. These firms are essential in keeping the UK economy functioning.
“Deferring VAT payments will help with cash-flow and ensure that businesses, many of which are small-to-medium sized, will be able to continue operating. Such firms are already having to cope with declining demand, problems sourcing products and significant increases in transport costs.
“Deferment of import VAT will be an essential lifeline.”
