If you’re importing goods to the UK from specific parts of the globe then you’ll 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 on 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 along with certain activities like gambling are vatcheck.com/vat governed by excise duties while almost all other imports come under customs duties and import vat according to the goods and also the country from which they arrive.
The hmrc has specified eu special territories where import vat is going to be levied if goods or services 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 may also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom you’ll be able to make application for a vat refund in case 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’ve imported are sold in the local UK market. Countries like the UK and Italy offer special vat deferment schemes where you can get relief 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.
Once you start selling your services or goods from your market then you will 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 hire the services of a proficient vat and customs agent. This may enable you to concentrate on expanding your business while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rates are exactly like sales vat rates of comparable products available in the UK. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% which is slated to go up to 20% from January 4, 2011. Second is the reduced vat rate of 5% whilst the third is zero vat rate. There’s 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 charges with an accurate basis. You should employ all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can reduce your costs further and improve the income of your business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the expertise of an efficient vat agent to claim additional vat back.