If you’re importing goods to the UK from specific regions of the globe then you will 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 at the port or airport itself and also the goods are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services which are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products along with certain activities such as gambling are governed by excise duties while almost every other imports come 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 will be levied if services or goods are brought in or delivered to such territories. Those are the vat check 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’re a vat registered trader in the United Kingdom 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 may also offset this vat against sales vat if the goods that you have imported are sold in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where you can get relief from import vat for up to a 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 from your market then you’ll also have to charge any local sales vat rate to the 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 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 rate is exactly like sales vat rates of comparable products available in the UK. The United Kingdom has 3 vat rate slabs. The very first is the standard 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% while the third is zero vat rate. There are also certain goods and services which are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK to enable you to calculate the costs on 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 enhance the income of your respective business. You need to 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.