If you’re importing goods into the UK from specific regions of the globe then you’ll need 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 at 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 which are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products together with certain activities like gambling are subject to excise duties while almost every other imports fall under customs duties and import vat according to the goods and the country from which 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. 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 UK. This vat may also be levied whenever you import goods from non eu https://vatregistrationnumber.com countries.
However, if you are 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 to the UK. You can also offset this vat against sales vat if the goods that you’ve imported are sold in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where one can get relief 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 services or goods in the local market then you’ll also have 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 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 rates are exactly like sales vat rates of comparable products sold in the United Kingdom. The United Kingdom 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. Second is the lower vat rate of 5% while the third is zero vat rate. There’s also certain products or services that are totally exempt from the vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods into the UK to enable you to calculate the costs on an accurate basis. You should employ all legal avenues to lower your costs such as vat refunds, vat deferments, etc so that you can reduce your costs further and enhance 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 employ the expertise of an efficient vat agent to claim additional vat back.