If you’re importing goods to the UK from specific parts of the globe 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 the 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 that are subject to customs duties, excise duties and import vat. Most alcohol and tobacco products together with certain activities like gambling are vatcheck.com/vat governed by excise duties while almost every other imports come under customs duties and import vat depending on the goods and also the country from which they arrive.
The hmrc has specified eu special territories where import vat is going to be levied if services or goods are brought in or sent 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 United Kingdom. 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 may also offset this vat against sales vat when the goods that you have imported are offered in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where one can get relief from import vat for approximately one month by filing out a unique vat form with the hmrc and opening of a special vat deferment account with them. This move would help protect your cash flow.
When you start selling your goods or services in the local market then you’ll also need to charge any 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 engage the services of a proficient 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 an efficient manner.
The import vat rate is exactly like sales vat rates of similar products available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The very 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 reduced vat rate of 5% while the third is zero vat rate. There are also certain goods and services which are totally exempt from any vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the costs with 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 improve the income of your business. You need to diligently pay import vat whenever you import goods from eu special territories or from non eu countries and employ the expertise of a competent vat agent to claim additional vat back.