If you’re importing goods to the UK from specific regions of the world then you will have 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 on the port or airport itself and also 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 along with certain activities like gambling are governed by excise duties while vatvalidation.com/vat almost every 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 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 may also be levied when 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 when you have already paid vat on any goods in the country of origin itself before being imported into the UK. You can also offset this vat against sales vat if the goods that you have imported are offered in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where you can get relief from import vat for up to a 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 protect your cash flow.
Once you start selling your services or goods from your market then you’ll also need to charge the local sales vat rate to the 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 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 available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% which is slated to rise 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 which are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the charges with an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc to enable you to lower your costs further and improve the income of your respective business. You need to diligently pay import vat whenever 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.