If you are importing goods into the UK from specific parts of the globe 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 the hm revenue and customs department on 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 like gambling are governed by excise duties while almost all other imports come under customs duties and import vat according to the goods and also the country from where 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. They are The vat check 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’re a vat registered trader in the UK 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 if the goods that you’ve imported are offered from our UK market. Countries such as the UK and Italy offer special vat deferment schemes where you can get respite from import vat for approximately a month by filing out a unique 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 from your market then you’ll also have to charge the 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 should engage the services of an excellent vat and customs agent. This may enable 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 rates are exactly like sales vat rates of comparable products sold in the United Kingdom. The UK has 3 vat rate slabs. The very first is the standard vat rate of 17.5% which is slated to go up to 20% from January 4, 2011. The second is the lower vat rate of 5% whilst the third is zero vat rate. There are also certain products or services which are totally exempt from any 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 use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc to enable you to lower your costs further and enhance the cash flow of your respective business. You should diligently pay import vat when 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.