If you’re importing goods into the UK from specific regions of the globe then you’ll need to pay import vat whenever you import goods from eu special territories or even from non eu countries. This tax is collected by the hmrc vat department or hm revenue and customs department on the port or airport itself and also the items 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 tobacco products together with certain activities such as gambling are subject to excise duties while vatvalidation.com/vat almost every other imports come 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 will 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 UK then you can apply 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 products which you have imported are offered from our UK market. Countries such as the UK and Italy offer special vat deferment schemes where one can get relief from import vat for up to a month by filing out a special vat form with the hmrc and opening of an special vat deferment account with them. This move would help protect your cash flow.
Once you start selling your services or goods in the local market then you will also need to charge the local sales vat rate to the clients. You will need 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 definately should engage the services of a proficient vat and customs agent. This may enable you to focus on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rates are exactly like sales vat rates of comparable products sold 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. Second is the lower vat rate of 5% whilst the third is zero vat rate. There’s also certain products or services which are totally exempt from the vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the costs with an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc to enable you to reduce your costs further and enhance the cash flow of your respective business. You need to diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the services of a competent vat agent to claim additional vat back.