If you’re importing goods to the UK from specific regions of the globe then you’ll have to pay import vat whenever you import goods from eu special territories as well as from non eu countries. This tax is collected by the hmrc vat department or the hm revenue and customs department at the port or airport itself and the goods are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products checkvatnumber together with certain activities such as gambling are governed by excise duties while almost every other imports fall under customs duties and import vat depending on the goods and also the country from where they arrive.
The hmrc has specified eu special territories where import vat is going to be levied if services or goods are brought in or sent to such territories. Those are the French Overseas Departments of Guadeloupe, The Canary Islands in Spain, The Aland Islands in Finland, French Guiana, Mount Athos and Reunion and Martinique in Greece, and The Channel Islands in the United Kingdom. This vat may also be levied whenever you import goods from non eu countries.
However, if you’re a vat registered trader in the United Kingdom then you can make application for a vat refund in case you have already paid vat on any goods in the nation of origin itself before being imported to the UK. You may also offset this vat against sales vat if the goods that you’ve imported are offered from our UK market. Countries like the UK and Italy also offer special vat deferment schemes where one can get relief from import vat for up to a month by filing out a unique vat form with the hmrc and opening of an special vat deferment account with them. This move would help safeguard your cash flow.
When you start selling your services or goods in the local market then you will also have to charge the local sales vat rate to your clients. You will have to make vat invoices that specifically mention vat rates and also file regular vat returns. For those who have problem in understanding various duties and taxes imposed by the hmrc then you should hire the services of a proficient vat and customs agent. This may enable you to focus on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rate is exactly like sales vat rates of comparable products available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% that is slated to rise to 20% from January 4, 2011. The second is the reduced vat rate of 5% whilst the third is zero vat rate. There are also certain goods and services that are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the costs on an accurate basis. You should employ all legal avenues to lower your costs like vat refunds, vat deferments, etc to enable you to reduce your costs further and enhance the income of your respective business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the expertise of an efficient vat agent to claim additional vat back.