If you’re importing goods to the UK from specific regions of the world then you will need 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 at the port or airport itself and the goods are then governed by 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 tobacco products together with certain activities such as gambling are vatcheck.com/vat subject to excise duties while almost every other imports come under customs duties and import vat according to the goods and also the country from where they arrive.
The hmrc has specified eu special territories where import vat will be levied if goods or services are brought in or delivered 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 The Channel Islands in the United Kingdom. This vat will also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the UK then you can apply for a vat refund when you have already paid vat on any goods in the nation of origin itself before being imported to the UK. You can also offset this vat against sales vat if the goods that you’ve imported are sold from our UK market. Countries like the UK and Italy offer special vat deferment schemes where you can get respite from import vat for up to 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.
When you start selling your goods or services from your market then you will also have to charge the 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 hire the services of an excellent vat and customs agent. This may allow 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 rates are the same as sales vat rates of comparable products available in the United Kingdom. The UK has 3 vat rate slabs. The 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 reduced vat rate of 5% whilst the third is zero vat rate. There are also certain products or services that 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 use all legal avenues to reduce your costs like vat refunds, vat deferments, etc to enable you to lower your costs further and enhance the cash flow of your respective 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.