If you’re importing goods to the UK from specific parts of the world then you will 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 also the goods are then subject to 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 http://vatvalidation.com/vat 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 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 also the Channel Islands in the United Kingdom. This vat will also be levied whenever you import goods from non eu countries.
However, if you’re a vat registered trader in the UK you’ll be able to apply for a vat refund when you have already paid vat on any goods in the country of origin itself before being imported into the UK. You may also offset this vat against sales vat when the goods that you’ve imported are offered in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where one can get respite from import vat for up to one month by filing out a unique vat form with the hmrc and opening of an special vat deferment account with them. This move would help protect your cash flow.
When you start selling your services or goods in the local market then you’ll also need to charge the local sales vat rate to your 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 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 exactly like sales vat rates of similar products sold in the United Kingdom. The United Kingdom has 3 vat rate slabs. The first is the standard vat rate of 17.5% that is slated to rise to 20% from January 4, 2011. The 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 any 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 on 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 enhance the cash flow 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 use the expertise of an efficient vat agent to claim additional vat back.