If you are importing goods into the UK from specific regions of the world then you will 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 goods are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services that are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products vat check along with certain activities like 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 sent 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 when you import goods from non eu countries.
However, if you’re a vat registered trader in the United Kingdom then you can apply for a vat refund in case you have already paid vat on any goods in the country of origin itself before being imported to the UK. You can also offset this vat against sales vat if the products which you’ve imported are sold from our UK market. Countries such as the UK and Italy also offer special vat deferment schemes where one can get respite from import vat for approximately 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 safeguard your cash flow.
When you start selling your services or goods from your market then you will also need to charge any local sales vat rate to the clients. You will have to make vat invoices that specifically mention vat rates as well as file regular vat returns. If you have problem in understanding various duties and taxes imposed by the hmrc then you definately should hire the services of an excellent vat and customs agent. This will allow you to concentrate on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rate is the same as sales vat rates of similar products sold in the UK. The UK 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. 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 should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK to enable you to calculate the costs with an accurate basis. You should use all legal avenues to lower your costs like vat refunds, vat deferments, etc so that you can lower your costs further and improve the income of your respective business. You should 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.