If you’re importing goods to the UK from specific parts of the globe then you’ll 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 at the port or airport itself and the goods are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services which are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products www.vatcheck.com along with certain activities like gambling are governed by excise duties while almost every other imports fall under customs duties and import vat depending on the goods and the country from which they arrive.
The hmrc has specified eu special territories where import vat is going to be levied if services or goods are brought in or delivered to such territories. Those 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 also 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 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 products which you have imported are sold in the local UK market. Countries such as the UK and Italy 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.
Once you start selling your goods or services in the local market then you will also need to charge any local sales vat rate to your 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 should hire the services of a proficient vat and customs agent. This may allow you to focus 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 United Kingdom has 3 vat rate slabs. The very 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% while the third is zero vat rate. There’s 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 to the UK so that you can calculate the costs on an accurate basis. You should use all legal avenues to lower your costs such as vat refunds, vat deferments, etc to enable you to reduce 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.