If you’re importing goods into the UK from specific parts of the globe then you will have to pay import vat whenever you import goods from eu special territories as well as 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 goods 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 www.vatcheck.com/vat 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 whenever you import goods from non eu countries.
However, if you’re a vat registered trader in the UK then you can make application for a vat refund in case you have already paid vat on any goods in the nation of origin itself before being imported into the UK. You may also offset this vat against sales vat when the products which you have imported are sold in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where one can get respite from import vat for up to a 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 safeguard your cash flow.
Once you start selling your goods or services 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 and also file regular vat returns. For those who have problem in understanding various duties and taxes imposed by the hmrc then you should engage the services of a proficient vat and customs agent. This will enable 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 exactly like sales vat rates of similar products sold in the United Kingdom. The UK has 3 vat rate slabs. The very first is the normal vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. Second is the reduced vat rate of 5% while the third is zero vat rate. There are also certain products or services which are totally exempt from any vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the costs with an accurate basis. You should use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc to enable you to reduce your costs further and enhance the income of your respective business. You should 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.