If you’re importing goods into the UK from specific regions of the globe then you’ll have to pay import vat when you import goods from eu special territories as well as 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 also the goods are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services that are subject to 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 fall 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 goods or services are brought in or sent 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 also the Channel Islands in the UK. This vat may also be levied whenever you import goods from non eu vatregistrationnumber.com countries.
However, if you’re a vat registered trader in the United Kingdom you’ll be able to apply for a vat refund in case 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 if the goods that you have imported are sold in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where one can get relief from import vat for approximately a month by filing out a unique 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 in the local market then you’ll also need to charge the local sales vat rate to your clients. You will need 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 hire the services of an excellent vat and customs agent. This may enable you to focus on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rates are exactly like sales vat rates of comparable products available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. The second is the lower vat rate of 5% while the third is zero vat rate. There’s also certain goods and services that are totally exempt from the vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods into the UK to enable you to calculate the costs with an accurate basis. You should use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc so that you can reduce your costs further and improve the cash flow of your business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the expertise of a competent vat agent to claim additional vat back.