If you are importing goods into the UK from specific regions of the world 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 hm revenue and customs department at the port or airport itself and also the items are then governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services which are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products together with certain activities such as gambling are governed by excise duties while almost all other imports come 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 services or goods are brought in or sent to such territories. They are The www.vatcheck.com/vat 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 may also be levied when you import goods from non eu countries.
However, if you are 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 nation of origin itself before being imported to the UK. You may also offset this vat against sales vat if the products which you’ve imported are offered in the local UK market. Countries like the UK and Italy also 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 protect your cash flow.
Once you start selling your services or goods from your 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 and also file regular vat returns. For those who have problem in understanding various duties and taxes imposed by the hmrc then you should engage the services of an excellent vat and customs agent. This will allow 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 similar products sold in the UK. 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. Second is the lower vat rate of 5% while the third is zero vat rate. There’s also certain goods and services which are totally exempt from any vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the costs with 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 improve the income of your respective business. You should diligently pay import vat when 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.