If you’re importing goods to the UK from specific parts of the globe then you’ll have to pay import vat when you import goods from eu special territories or even from non eu countries. This tax is collected by the hmrc vat department or hm revenue and customs department on the port or airport itself and the items are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services which are subject to 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 vatvalidation.com/vat almost all other imports come under customs duties and import vat depending on 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 UK. This vat will also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom then you can apply for a vat refund when you have already paid vat on any goods in the nation of origin itself before being imported into the UK. You may also offset this vat against sales vat when the products which you’ve imported are offered from our UK market. Countries like the UK and Italy offer special vat deferment schemes where one can get relief from import vat for up to a month by filing out a special vat form with the hmrc and opening of an special vat deferment account with them. This move would help protect your cash flow.
Once you start selling your services or goods in the local market then you’ll also need to charge any local sales vat rate to the clients. You will have to make vat invoices that specifically mention vat rates and also file regular vat returns. For those who 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 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 rate is the same as sales vat rates of comparable products available in the UK. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. The second is the lower vat rate of 5% whilst the third is zero vat rate. There are also certain products or 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 with an accurate basis. You should use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc to enable you to lower your costs further and improve the cash flow of your respective business. You should diligently pay import vat when you import goods from eu special territories or from non eu countries and employ the expertise of an efficient vat agent to claim additional vat back.