If you’re importing goods into the UK from specific parts of the world then you’ll 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 governed by 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 tobacco products www.checkvatnumber.com together with certain activities like gambling are governed by excise duties while almost all other imports come under customs duties and import vat depending on the goods and also the country from where they arrive.
The hmrc has specified eu special territories where import vat is going to be levied if goods or services are brought in or delivered to such territories. They 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 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 then you can make application 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 may also offset this vat against sales vat if the products which you have imported are offered in the local UK market. Countries like the UK and Italy also 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 an special vat deferment account with them. This move would help safeguard your cash flow.
Once you start selling your services or goods in the local 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. For those who 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 may allow you to concentrate on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rates are the same as sales vat rates of comparable products available in the UK. The UK has 3 vat rate slabs. The very first is the normal vat rate of 17.5% that is slated to go up to 20% from January 4, 2011. Second is the lower vat rate of 5% whilst the third is zero vat rate. There’s also certain goods and services which are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK to enable you to calculate the charges with 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 enhance the cash flow 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 employ the services of a competent vat agent to claim additional vat back.