If you are importing goods to the UK from specific parts of the globe then you’ll 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 the hm revenue and customs department on the port or airport itself and the goods are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services which are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products 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 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 delivered 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 The Channel Islands in the UK. This vat will also be levied when you import goods from non eu countries.
However, if you’re 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 country of origin itself before being imported to the UK. You can also offset this vat against sales vat when the products which you have imported are sold from our UK market. Countries like the UK and Italy offer special vat deferment schemes where you can get relief from import vat for approximately 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 safeguard your cash flow.
Once you start selling your goods or services from your market then you will also have to charge any local sales vat rate to your clients. You will have to make vat invoices that specifically mention vat rates as well as file regular vat returns. If you have problem in understanding various duties and taxes imposed by the hmrc then you should hire the services of an excellent vat and customs agent. This may allow you to concentrate on expanding your business 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 first is the normal vat rate of 17.5% that is slated to rise 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 should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK to enable you to calculate the costs on an accurate basis. You should use all legal avenues to lower 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 should diligently pay import vat when you import goods from eu special territories or from non eu countries and use the expertise of a competent vat agent to claim additional vat back.