Running a business in the UK that requires importing goods can be stressful unless you know about vat customs rules imposed by the HM Revenue and Customs vatcontrol.com/vat department. Learning all about these rules can benefit your business as you’re able make sure that your purchase and sales deadlines are maintained as well as your cost is kept to the minimum.
In case you import taxable goods to the UK you will then be charged import vat or customs duties. These duties need to be paid on the valuation of the goods and they are governed by vat rules that form part of the Vat Act of 1994. How much customs duty to be paid is known as the ?ad valorem duty? and there are 6 methods that can be used to reach the amount of this duty. You will have to provide documentary proof to hmrc vat department as to the reasons you have chosen a particular method for the valuation on the products which you’ve imported into the UK.
If you have imported goods to the UK from a eu country which has also collected vat tax from you before the 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 United Kingdom then you can apply for vat reclaim to get the earlier amount back into your bank account. You will need to mention your vat number and provide your vat certificate to the country of origin when you file for a vat refund. Although the refund process could take between four to 8 months to materialize, your costs will definitely get lowered. You ought to employ the services of a competent vat agent that charges fees only on the volume of refunds that you get. This move will give you a reason for your vat agent while rewarding you with many successful vat refunds.
Once you’ve paid vat customs on the goods and start selling precisely the same under vat invoices then you’ll have to maintain detailed accounts of the amount of vat paid and collected on them. You will have to mention these vat amounts in your vat returns that will need to be filed regularly based on the vat scheme which you have chosen. Remember that 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 must have complete knowledge on customs and excise rules as well as eu vat and uk vat rules to ensure that there are no miscalculations while importing goods to the UK.
If you’re a vat registered trader in the UK that must import goods to the UK then you will 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 even on services that were utilised in that country. A competent vat agent will help you decipher vat customs rules and help you to get back all excess vat previously paid whilst helping smooth entry of imported goods into the UK.