If you’re importing goods to the UK from specific parts of the globe then you will need 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 the hm revenue and customs department at the port or airport itself and also the goods are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services which are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products together with certain activities such as gambling are subject to excise duties while vatvalidation.com/vat almost all other imports fall under customs duties and import vat according to the goods and the country from which they arrive.
The hmrc has specified eu special territories where import vat will be levied if goods or services 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 The Channel Islands in the UK. 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 country of origin itself before being imported to the UK. You can also offset this vat against sales vat when the products which you’ve imported are sold in the local UK market. Countries like the UK and Italy offer special vat deferment schemes where one can get relief from import vat for approximately one month by filing out a special vat form with the hmrc and opening of an 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 have to charge the local sales vat rate to the clients. You will need 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 definately should engage the services of a proficient vat and customs agent. This will enable you to focus on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rate is exactly like sales vat rates of comparable products sold 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 rise to 20% from January 4, 2011. Second is the reduced vat rate of 5% whilst the third is zero vat rate. There are also certain products or services which are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the costs with an accurate basis. You should employ 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 income of your respective business. You should diligently pay import vat whenever 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.