Your profit margins could be severely impacted if you don’t factor in important levies that contribute to the cost of your product or service and this makes it critical for you to decipher customs and excise vat duties to improve your earnings. If you want to start a trading or manufacturing business in any EU State then it is vital that you comprehend the significance of various duties when you import and sell your goods.
If you wish to start importing goods and services to your country then you will have to pay customs duties, excise duties, or import vat on those products or services depending on the classification under which they fall. If your organization is based in the UK and you intend to import goods from other EU States like Poland, Sweden, Germany, etc then a thorough understanding of uk vat is important when you start selling your goods in the local market. If your goods or services already have incurred eu vat in their home countries before you decide to import it to the UK then you can certainly apply for vat reclaim in those countries in order to lower your product costs and stop double taxation.
In the united kingdom, it’s the hm customs and excise department that handles all matters linked to customs and excise vat on products and services imported and sold inside the country. Most commercial products fall in one of the 14,000 classifications specified by the customs division while most tobacco and alcohol products will attract excise duties. Many products also attract import vat while being imported to the UK. Most products also attract sales vat or value added tax when they’re sold locally and it is the hm revenue and customs department that will be tracking the sales. Once your sales go over the vat threshold limit of over £70,000 in the past 1 year you might have to get vat registered.
Vat registration won’t just allow you to charge vat to your clients as part of your vat invoice but also permit you to claim a vat refund in case you have already paid vat in the country of origin before importing it to the UK. A skilled customs, excise and vat agent or consultant should be employed to ensure that all your imports and vat returns are handled efficiently. There are numerous products that attract lower import duties and vat rates, while many will also be vat exempt. You can surely lower your product costs by slotting them within the correct category in addition to claiming vat refunds prior to time limit.
Failure to cover the significance of customs and excise vat duties could prove to be fatal to your business. You won’t just end up with higher product costs but also in case you end up causing losses towards vat customs and excise department then you could be booked for fraudulently importing or selling goods or services in the united kingdom or even in the country of origin. You might lose out on a real vat refund if you are not conversant with all the latest vat rules.
When running a business, it is important to allow professionals to help you, specially when the task involves lowering your costs legally and dealing with important gov departments. It is vital that you tie up with the efficient customs and excise vat consultant or agency which provides all import and vat services in one place so as to enhance your business net profit.