If you’re importing goods to the UK from specific regions of the world 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 hm revenue and customs department at the port or airport itself and also the items are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products checkvatnumber.com together with certain activities like gambling are subject to excise duties while almost every other imports come under customs duties and import vat depending on 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 services or goods 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 also the Channel Islands in the UK. This vat will also be levied when you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom then you can make application for a vat refund when 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 products which you’ve imported are offered from our 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 a special vat deferment account with them. This move would help protect your cash flow.
Once you start selling your goods or services in the local market then you will 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 should engage the services of a proficient vat and customs agent. This may enable you to concentrate on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rates are the same as 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% that is slated to go up to 20% from January 4, 2011. Second is the reduced 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 ought to 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 use all legal avenues to lower your costs such as vat refunds, vat deferments, etc to enable you to lower your costs further and enhance the income of your business. You need to diligently pay import vat when you import goods from eu special territories or from non eu countries and use the services of an efficient vat agent to claim additional vat back.