Running a business in the UK that requires importing goods is usually stressful unless you know about vat customs rules imposed by the HM Revenue and Customs department. Learning all about these rules can benefit your business as you’re able ensure that your purchase and sales deadlines are maintained and your cost is kept to the minimum.
If you import taxable goods to the UK then you will be charged import vat or customs duties. These duties need to be paid on the value of the goods and are subject to vat rules that form part of the Vat Act of 1994. The amount of customs duty to be paid is called the ?ad valorem duty? and then there are 6 methods that can be used www.vatvalidation.com/vat to reach the amount of this duty. You will have to provide documentary proof to hmrc vat department as to the reasons you’ve chosen a certain way of the valuation of the products which you have imported into the UK.
In case you have imported goods into the UK originating from a eu country which has also collected vat tax from you prior to goods were dispatched to the UK then you’ve effectively paid double tax on the same goods. If you are a vat registered trader in the UK you’ll be able to apply for vat reclaim to get the previous amount back into your bank account. You will need to mention your vat number and give your vat certificate to the country of origin when you apply for a vat refund. Although refund process might take between four to eight months to materialize, your costs will certainly get lowered. You should employ the expertise of a capable vat agent that charges fees only on the volume of refunds that you receive. This move will provide an incentive to your vat agent while rewarding you with lots of successful vat refunds.
Once you’ve paid vat customs on your goods and start selling the same under vat invoices then you will have to maintain detailed accounts of the amount of vat paid and collected built in. You will have to mention these vat amounts in your vat returns which will have to be filed regularly in line with the vat scheme that you have chosen. You should remember that any genuine mistake by you while importing goods to the UK should be rectified as soon as possible since it may be construed as evasion of customs duties and would invoke strict action including penalties from the hmrc department. Your vat agent should have complete knowledge on customs and excise rules along with eu vat and uk vat rules so that there aren’t any miscalculations while importing goods to the UK.
If you are a vat registered trader in the United Kingdom that needs to import goods to the UK then you’ll surely have to pay all applicable customs duties on the same. However, you may also reclaim vat amounts paid in the country of origin on goods and also on services that were utilised in that country. A reliable vat agent can help you decipher vat customs rules and help you get back all excess vat previously paid whilst helping smooth entry of imported goods into the UK.