If you’re importing goods to the UK from specific parts of the world then you will have to pay import vat when 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 the items are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products along with certain activities like gambling are subject to 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 is going to be levied if goods or services are brought in or delivered to such territories. Those are the http://vatcheck.com/vat 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 also the Channel Islands in the UK. 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 you’ll be able to apply for a vat refund when you have already paid vat on any goods in the country of origin itself before being imported into the UK. You can 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 also offer special vat deferment schemes where you can get respite from import vat for approximately one 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 protect your cash flow.
When you start selling your services or goods from your market then you will also have to charge the local sales vat rate to your 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 allow you to concentrate on expanding your business 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 sold in the United Kingdom. The UK has 3 vat rate slabs. The first is the normal vat rate of 17.5% which 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’s 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 like vat refunds, vat deferments, etc to enable you to lower your costs further and enhance the cash flow of your business. You should diligently pay import vat whenever you import goods from eu special territories or from non eu countries and employ the expertise of a competent vat agent to claim additional vat back.