If you’re importing goods into the UK from specific parts of the world then you will need to pay import vat whenever 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 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 cigarettes and tobacco products http://vatcheck.com along with certain activities like gambling are subject to excise duties while almost every other imports come 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 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 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 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 offered from our UK market. Countries like the UK and Italy offer special vat deferment schemes where one can get relief 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 goods or services in the local market then you’ll also have to charge any local sales vat rate to your clients. You will need 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 may enable you to focus on expanding your business while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rates are exactly like sales vat rates of comparable products available in the United Kingdom. The United Kingdom 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. The 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 so that you can calculate the charges with an accurate basis. You should use 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 cash flow of your business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and use the services of a competent vat agent to claim additional vat back.