If you’re importing goods into the UK from specific parts of the globe then you will 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 hm revenue and customs department at the port or airport itself and the items are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services which are governed by customs duties, excise duties and import vat. Most alcohol and tobacco products along with certain activities such as gambling are governed by excise duties while almost every other imports come under customs duties and import vat according to the goods and also the country from where they arrive.
The hmrc has specified eu special territories where import vat will be levied if goods or services are brought in or delivered to such territories. They 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 vatregistrationnumber.com countries.
However, if you’re a vat registered trader in the United Kingdom you’ll be able to apply for a vat refund in case you have already paid vat on any goods in the nation of origin itself before being imported into the UK. You may also offset this vat against sales vat if the products which you have imported are sold in the local UK market. Countries like the UK and Italy also offer special vat deferment schemes where you can get relief from import vat for up to a month by filing out a special vat form with the hmrc and opening of a special vat deferment account with them. This move would help safeguard your cash flow.
When you start selling your goods or services from your market then you will also need to charge the local sales vat rate to your clients. You will have to make vat invoices that specifically mention vat rates as well as 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 concentrate on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rate is the same as sales vat rates of similar products sold in the United Kingdom. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. The second is the lower vat rate of 5% whilst the third is zero vat rate. There’s also certain goods and services which 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 charges on an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc to enable you to lower your costs further and improve the cash flow of your respective business. You should diligently pay import vat whenever you import goods from eu special territories or from non eu countries and use the expertise of an efficient vat agent to claim additional vat back.