If you’re importing goods into the UK from specific parts of the world then you will have to pay import vat when 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 at the port or airport itself and also the items are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products www.checkvatnumber.com together with certain activities like gambling are subject to excise duties while almost every other imports come 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. 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 also the Channel Islands in the UK. This vat will also be levied whenever you import goods from non eu countries.
However, if you’re a vat registered trader in the United Kingdom 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 into the UK. You can 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 offer special vat deferment schemes where you can get relief from import vat for approximately a 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 in the local market then you’ll also have to charge the local sales vat rate to the clients. You will have to make vat invoices that specifically mention vat rates as well as file regular vat returns. For those who have problem in understanding various duties and taxes imposed by the hmrc then you definately should engage the services of a proficient vat and customs agent. This may allow you to concentrate on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rate is exactly like sales vat rates of similar products sold in the United Kingdom. The UK 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 lower vat rate of 5% while the third is zero vat rate. There’s also certain products or services which are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the charges with an accurate basis. You should employ all legal avenues to reduce your costs such as vat refunds, vat deferments, etc so that you can reduce your costs further and improve the income of your respective business. You need to diligently pay import vat whenever 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.