Leaving the EU without an agreement in place (no-deal Brexit) is going to create some VAT challenges for businesses which import goods.
Currently, import VAT is payable on goods imported from non-EU countries, and that has to be paid up-front. This import VAT would also have to be paid up-front on any goods coming in from EU countries after Brexit, unless other arrangements are put in place.
The Government is proposing that, immediately following a no-deal Brexit, all import VAT will be paid on a postponed basis. This means VAT-registered businesses will account for import VAT on their VAT return, rather than paying import VAT at the time that the goods arrive at the UK border. This procedure will apply to all imported goods from the EU and from non-EU countries.
Customs declarations and the payment of any other duties will still be required at the border, but at least the VAT problem will be parked.
This will of course open up the possibilities for VAT to go missing in the supply chain and no doubt the Government will have to put in other measures to counter that.