Operating a business in the UK that requires importing goods can be stressful unless you know all about vat customs rules imposed by the HM Revenue and Customs department. Learning all about these rules can benefit your organization as you can ensure that your purchase and sales deadlines are maintained and your cost is kept to the minimum.
If you import taxable goods into the UK you will then be charged import vat or customs duties. These duties need to be paid on the value of the products and are subject to vat rules that form part of the Vat Act of 1994. The amount of customs duty to be paid is called the ?ad valorem duty? and there are 6 methods you can use vat registration number to reach the amount of this duty. You will need to provide documentary proof to hmrc vat department as to the reasons you’ve chosen a particular method for the valuation on the products which you’ve imported into the UK.
In case you have imported goods to the UK from a eu country that has also collected vat tax from you prior to goods were dispatched to the UK then you have effectively paid double tax on the same goods. If you’re a vat registered trader in the United Kingdom then you can apply for vat reclaim to get the previous amount back to your account. You will have to mention your vat number and give your vat certificate to the country of origin when you file for a vat refund. Although the refund process might take between four to 8 months to materialize, your costs will definitely get lowered. You ought to employ the expertise of a competent vat agent that charges fees only on the amount of refunds that you get. This move will give you a reason to your vat agent while rewarding you with lots of successful vat refunds.
Once you have paid vat customs on your goods and start selling the same under vat invoices then you’ll need to maintain detailed accounts of the amount of vat paid and collected built in. You will have to mention these vat amounts in your vat returns which will have to be filed regularly in line with the vat scheme which you have chosen. You should remember that any genuine mistake on your part while importing goods to the UK should be rectified as soon as possible as it could be construed as evasion of customs duties and would invoke strict action including penalties from the hmrc department. Your vat agent must have complete knowledge on customs and excise rules as well as eu vat and uk vat rules so that there are no miscalculations while importing goods to the UK.
If you’re a vat registered trader in the UK that must import goods to the UK then you’ll surely need to pay all applicable customs duties on the same. However, you can also reclaim vat amounts paid in the country of origin on goods and even on services that were utilized in that country. A reliable vat agent can help you decipher vat customs rules and help you to get back all excess vat previously paid while also helping smooth entry of imported goods into the UK.