If you intend to start a business in the UK and want to import goods into the country then you certainly should make sure you pay proper customs vat on imported goods so that your costs satisfy your predictions. You possibly can surely ensure improved profit margins if your purchase and sale price are usually in tune with all your calculations.
The hm revenue and customs department or hmrc vat department handles duties on imported goods and services into the UK, and in addition handles vat returns filed by vat registered traders in the united kingdom. Once your taxable sales cross 70,000 pounds in Twelve months you might have to get vat registration. This in turn will allow you to obtain a vat number and generate a vat invoice for each sale made in the regional market. You’ll now need to file a vat return in the designated period and pay vat based on the current vat rate based on the sales.
However, before you start selling your goods or services, you might need to import them into the UK. Your goods will in all probability fall into on the list of 14,000 hm customs vat classifications and you will need to pay the appropriate duties on those goods. In case you plan to import tobacco or alcohol products then you will need to pay excise duties on the same. It is thus extremely important to check on the correct classification of your goods so that you end up making payment on the exact amount of duties specified on it instead of paying more and boosting your costs or paying less and getting into trouble at a later date.
Once you have paid all the relevant import vat, or customs, or excise duties then you’ll also have to charge the right vat rates while selling those goods locally. Your products might attract the standard vat rate of 17.5% or a reduced rate of 5% or even be vat exempt depending on its classification. This rate will definitely vary in other EU countries and thus you ought to have up-to-date knowledge on uk vat and eu vat rates while importing or exporting your goods as well as selling them locally.
Since it may be quite challenging for you to keep updating your understanding on changes taking place in customs and vat rates, make sure you appoint a good customs and vat agent to handle your import and sales duties. Your agent would take care of all paperwork related to customs duties, evaluate whether your goods are classified correctly, calculate all vat figures and also file your vat returns in time. Your agent would also be able to assist you in vat registration and provide other vat services if your business has just been established.
If you are planning to import goods into the UK or in another EU country then a detailed knowledge on all vat rules, customs and excise duties, and operations on vat returns is critical for healthy business growth. One mistake you could end up earning the wrath of your customs and excise vat department and put a spanner on future vat refunds. While importing goods into your country you ought to certainly make sure you pay proper customs vat on imported goods in order to retain complete control of your costs.