If you’re importing goods to the UK from specific regions of the globe then you will need to pay import vat when you import goods from eu special territories as well as from non eu countries. This tax is collected by the hmrc vat department or the 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 products and services which are subject to customs duties, excise duties and import vat. Most alcohol and tobacco products together with certain activities like gambling are governed by excise duties while vatvalidation.com/vat almost all other imports come 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 is going to 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 also the Channel Islands in the UK. This vat may also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom then you can make application 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 goods that you have imported are sold from our UK market. Countries like the UK and Italy offer special vat deferment schemes where one can get respite from import vat for approximately one 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 protect your cash flow.
Once you start selling your services or goods in the local market then you will also have to charge the local sales vat rate to your clients. You will have to make vat invoices that specifically mention vat rates and also file regular vat returns. If you 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 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 the same as 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. Second is the reduced vat rate of 5% while the third is zero vat rate. There’s also certain goods and services which are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can 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 reduce your costs further and improve the income of your respective business. You need to diligently pay import vat when you import goods from eu special territories or from non eu countries and use the services of an efficient vat agent to claim additional vat back.