If you’re importing goods to the UK from specific parts of the world then you’ll have to pay import vat whenever you import goods from eu special territories as well as 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 governed by customs duties, excise duties and import vat. Most alcohol and tobacco products together with certain activities like gambling are http://vatcheck.com/vat subject to excise duties while almost all other imports fall 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. 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 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 UK then you can make application 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 may also offset this vat against sales vat when the goods that you have imported are offered from our UK market. Countries such as the UK and Italy offer special vat deferment schemes where you can get respite 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.
When you start selling your services or goods in the local 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 enable 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 exactly like sales vat rates of similar products available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% that is slated to go up to 20% from January 4, 2011. The second is the lower vat rate of 5% whilst the third is zero vat rate. There’s also certain products or 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 so that you can calculate the charges with an accurate basis. You should employ all legal avenues to lower your costs like vat refunds, vat deferments, etc to enable you to reduce your costs further and improve the cash flow of your respective business. You should diligently pay import vat whenever you import goods from eu special territories or from non eu countries and use the expertise of an efficient vat agent to claim additional vat back.