If you’re importing goods into the UK from specific parts of the world 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 the hm revenue and customs department at 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 which are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products www.vatcheck.com together with certain activities such as gambling are subject to excise duties while almost all other imports come under customs duties and import vat depending on the goods and 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 delivered 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 UK. 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 then you can make application for a vat refund in case 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 products which you have imported are offered from our UK market. Countries such as the UK and Italy also offer special vat deferment schemes where you 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 safeguard your cash flow.
Once you start selling your goods or services from your market then you will also need to charge any local sales vat rate to your clients. You will need to make vat invoices that specifically mention vat rates as well as file regular vat returns. If you have problem in understanding various duties and taxes imposed by the hmrc then you should hire the services of an excellent 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 rate is exactly like sales vat rates of comparable products sold in the UK. The UK has 3 vat rate slabs. The very first is the normal vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. Second is the reduced vat rate of 5% whilst the third is zero vat rate. There are also certain goods and services which are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the costs on an accurate basis. You should use all legal avenues to lower your costs like vat refunds, vat deferments, etc to enable you to reduce your costs further and enhance the income of your 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.