If you’re importing goods to the UK from specific regions of the world 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 hm revenue and customs department at the port or airport itself and also the items are then subject to 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 along with certain activities like gambling are governed by excise duties while vatvalidation.com/vat almost every other imports come under customs duties and import vat according to the goods and the country from where 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 also the Channel Islands in the United Kingdom. This vat will also be levied when you import goods from non eu countries.
However, if you are a vat registered trader in the UK you’ll be able to make application 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 if the goods that you’ve 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 up to one month by filing out a unique vat form with the hmrc and opening of an special vat deferment account with them. This move would help protect your cash flow.
Once you start selling your goods or services in the local market then you’ll also have to charge the local sales vat rate to your clients. You will have to make vat invoices that specifically mention vat rates and also file regular vat returns. If you 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 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 the same as sales vat rates of similar products sold in the UK. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% which 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’s also certain products or services that are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the charges with an accurate basis. You should employ all legal avenues to reduce your costs like vat refunds, vat deferments, etc to enable you to lower your costs further and enhance the income of your respective business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the services of a competent vat agent to claim additional vat back.