If you’re importing goods into the UK from specific parts of the world then you’ll 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 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 goods and services which are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products together with certain activities such as gambling are http://vatcheck.com/vat governed by excise duties while almost every other imports come under customs duties and import vat depending on 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 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 UK. This vat will 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 apply 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 can also offset this vat against sales vat when the products which you’ve imported are sold in the local 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 a special vat deferment account with them. This move would help safeguard your cash flow.
When you start selling your services or goods from your market then you’ll also have to charge any local sales vat rate to the 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 definately should engage the services of an excellent vat and customs agent. This will allow you to concentrate on expanding your business 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 UK. The UK has 3 vat rate slabs. The first is the standard vat rate of 17.5% that is slated to go up to 20% from January 4, 2011. Second is the reduced vat rate of 5% whilst the third is zero vat rate. There are also certain goods and services that are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the charges on an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can reduce your costs further and improve the cash flow 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 employ the services of a competent vat agent to claim additional vat back.