Operating 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 https://vatcontrol.com/vat department. Learning all about these rules may benefit your organization as you’re able ensure that your purchase and sales deadlines are maintained and your cost is kept to the minimum.
In case you import taxable goods to the UK then you will be charged import vat or customs duties. These duties have to be paid on the valuation of the products and are subject to vat rules that form part of the Vat Act of 1994. How much customs duty to generally 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 need to provide documentary proof to hmrc vat department as to why you’ve chosen a particular way of the valuation on the products which you have imported to the UK.
In case you have imported goods into the UK originating from a eu country which has also collected vat tax from you before the goods were dispatched to the UK then you have effectively paid double tax on the same goods. If you’re a vat registered trader in the UK then you can make an application for vat reclaim so as to get the previous amount back to your account. You will need to mention your vat number and give your vat certificate to the country of origin whenever you file for a vat refund. Although 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 an incentive to your vat agent while rewarding you with many successful vat refunds.
Once you’ve paid vat customs on your 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’ll 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. You should remember that any genuine mistake on your part while importing goods to the UK ought to be rectified as quickly as possible as it could be construed as evasion of customs duties and would invoke strict action including penalties from the hmrc department. Your vat agent should have complete knowledge on customs and excise rules along with eu vat and uk vat rules to ensure that there aren’t any miscalculations while importing goods into the UK.
If you’re a vat registered trader in the UK that must import goods to the UK then you will surely need to pay all applicable customs duties on the very same. However, you may also claim back vat amounts paid in the country of origin on goods and also on services that have been utilized in that country. A competent vat agent can help you decipher vat customs rules and help you get back all excess vat previously paid while also helping smooth entry of imported goods into the UK.