Your profit margins could be severely impacted if you fail to take into account important levies that play a role in the cost of your products which makes it crucial for you to decipher customs and excise vat duties to enhance your revenue. If you wish to start a trading or manufacturing business in any EU State then it is imperative that you understand the importance of various duties whenever you import and then sell your goods.
If you wish to start importing goods and services into your country then you will have to pay customs duties, excise duties, or import vat on those products or services dependant upon the classification under which they fall. If your organization is based in the UK and you also intend to import goods from other EU States like Poland, Sweden, Germany, etc a thorough knowledge of uk vat is important when you start selling your goods in the local market. If your services or goods have already incurred eu vat in their home countries before you import it to the UK then you can certainly apply for vat reclaim in those countries so as to lower your product costs and prevent double taxation.
In the UK, it’s the hm customs and excise department that handles all matters related to customs and excise vat on products and services imported and sold inside the country. Most commercial products fall within one of the 14,000 classifications specified by the customs division while most tobacco and alcohol products will attract excise duties. Many products also attract import vat while being imported to the UK. Most products also attract sales vat or value added tax when they are sold locally and it is the hm revenue and customs department that’ll be tracking the sales. Once your sales go over the vat threshold limit of more than £70,000 during the past 1 year then you may have to get vat registered.
Vat registration will not only allow you to charge vat to the clients in your vat invoice but also allow you to claim a vat refund in case you have already paid vat in the country of origin before importing it to the UK. An experienced customs, excise and vat agent or consultant should be employed so that all of your imports and vat returns are handled efficiently. There are several goods that attract lower import duties and vat rates, while some will also be vat exempt. It is possible to surely lower your product costs by slotting them in the correct category in addition to claiming vat refunds well before the time limit.
Failure to cover the significance of customs and excise vat duties could prove to be fatal for your business. You won’t just end up having higher product costs but also in case you end up causing losses to the vat customs and excise department then you may be booked for fraudulently importing or selling goods or services in the united kingdom or perhaps the country of origin. You could also lose out on a real vat refund if you are not conversant with the latest vat rules.
When running a business, it is important to allow professionals to guide you, especially when the job involves lowering your costs legally and addressing important gov departments. It is very important that you tie up with the efficient customs and excise vat consultant or agency which provides all import and vat services in one place so as to improve your business net profit.