If you are importing goods to the UK from specific regions of the globe then you will have to pay import vat when 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 goods are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services that are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products along with certain activities such as gambling are subject to excise duties while almost every other imports come under customs duties and import vat depending on the goods and 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. They are The http://vatcheck.com/vat 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 may also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom then you can apply for a vat refund when you have already paid vat on any goods in the nation of origin itself before being imported into the UK. You can also offset this vat against sales vat if the products which you’ve imported are offered in the local UK market. Countries like the UK and Italy offer special vat deferment schemes where you can get respite from import vat for approximately one 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.
When you start selling your services or goods from your market then you’ll also need to charge any 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. For those who 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 will enable you to focus on expanding your enterprise 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 UK. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% which is slated to go up to 20% from January 4, 2011. The second is the reduced vat rate of 5% whilst the third is zero vat rate. There’s also certain goods and services that are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the costs with an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can 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.