If you are importing goods to the UK from specific regions of the world then you’ll need 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 also the items are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products together with certain activities such as gambling are governed by excise duties while vatvalidation.com/vat almost every other imports fall under customs duties and import vat according to the goods and also the country from which they arrive.
The hmrc has specified eu special territories where import vat will 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 will also be levied whenever you import goods from non eu countries.
However, if you’re a vat registered trader in the United Kingdom you’ll be able to 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 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 an special vat deferment account with them. This move would help safeguard your cash flow.
Once you start selling your services or goods from your market then you will also have to charge any 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 hire the services of a proficient 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 an efficient manner.
The import vat rate is exactly like sales vat rates of similar products available in the United Kingdom. The United Kingdom 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 any vat.
You ought to 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 employ all legal avenues to lower your costs such as vat refunds, vat deferments, etc so that you can lower your costs further and improve the income of your 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 a competent vat agent to claim additional vat back.