If you are importing goods to the UK from specific parts of the world then you’ll have 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 the hm revenue and customs department on 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 cigarettes and tobacco products www.checkvatnumber.com together with certain activities such as gambling are governed by excise duties while almost every other imports fall under customs duties and import vat according to the goods and 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 UK. This vat will also be levied when you import goods from non eu countries.
However, if you’re a vat registered trader in the United Kingdom you’ll be able to apply for a vat refund when 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 when the goods that you’ve imported are sold in the local UK market. Countries like the UK and Italy offer special vat deferment schemes where you can get respite from import vat for up to one 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 protect your cash flow.
When you start selling your goods or services from your market then you will also need to charge any local sales vat rate to the clients. You will need 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 definately should engage the services of an excellent vat and customs agent. This may allow you to concentrate on expanding your enterprise 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 comparable products available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% that is slated to go up 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 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 on an accurate basis. You should employ all legal avenues to lower your costs such as vat refunds, vat deferments, etc to enable you to lower your costs further and improve the income of your business. You need to 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.