If you’re importing goods into the UK from specific regions of the globe then you’ll have to pay import vat whenever you import goods from eu special territories or even from non eu countries. This tax is collected by the hmrc vat department or the hm revenue and customs department on the port or airport itself and the items are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services which are governed by customs duties, excise duties and import vat. Most alcohol and tobacco products together with certain activities such as gambling are subject to excise duties while http://vatvalidation.com/vat almost all other imports fall under customs duties and import vat depending on the goods and also the country from which they arrive.
The hmrc has specified eu special territories where import vat will 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 The Channel Islands in the United Kingdom. This vat will also be levied when you import goods from non eu countries.
However, if you’re a vat registered trader in the United Kingdom you’ll be able to 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 goods that you have imported are sold from our UK market. Countries like the UK and Italy also offer special vat deferment schemes where one can get respite from import vat for approximately a month by filing out a unique 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 any 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. If you have problem in understanding various duties and taxes imposed by the hmrc then you definately 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 rate is the same as sales vat rates of similar products available in the United Kingdom. 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. The second is the reduced vat rate of 5% while the third is zero vat rate. There’s also certain products or services which are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the costs with an accurate basis. You should use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc to enable you to reduce your costs further and improve the income 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 employ the expertise of a competent vat agent to claim additional vat back.