If you’re importing goods to the UK from specific regions of the globe then you’ll need to pay import vat when you import goods from eu special territories as well as 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 governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are subject to customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products along with certain activities like gambling are governed by excise duties while almost every 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 services or goods are brought in or delivered to such territories. They are The vat check 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 may also be levied whenever you import goods from non eu countries.
However, if you’re a vat registered trader in the UK you’ll be able to apply for a vat refund in case you have already paid vat on any goods in the country of origin itself before being imported to the UK. You may also offset this vat against sales vat when the goods that you’ve imported are offered in the local UK market. Countries like the UK and Italy also offer special vat deferment schemes where one can get respite 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 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 the clients. You will have 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 definately should hire the services of a proficient vat and customs agent. This may enable you to concentrate on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rates are the same as 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% while the third is zero vat rate. There’s also certain goods and services that are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK to enable you to calculate the charges with an accurate basis. You should employ all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can lower your costs further and improve the cash flow of your respective business. You should diligently pay import vat whenever 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.