If you’re importing goods into the UK from specific regions of the globe 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 on 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 governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products vatcheck together with certain activities like gambling are subject to excise duties while almost every other imports fall under customs duties and import vat depending on the goods and also the country from where 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 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 The Channel Islands in the United Kingdom. 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 nation of origin itself before being imported to the UK. You can also offset this vat against sales vat if the goods that you’ve imported are sold in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where you can get relief from import vat for approximately a month by filing out a unique vat form with the hmrc and opening of a special vat deferment account with them. This move would help safeguard your cash flow.
When you start selling your goods or services in the local market then you’ll also need to charge any local sales vat rate to your clients. You will have 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 definately should engage the services of an excellent vat and customs agent. This will allow you to focus on expanding your business while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rates are exactly like sales vat rates of similar products sold in the UK. 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 reduced vat rate of 5% whilst the third is zero vat rate. There’s also certain goods and 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 costs on an accurate basis. You should use all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can lower your costs further and improve the income of your respective business. You need to diligently pay import vat when 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.