If you are importing goods to the UK from specific regions of the world 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 governed by local sales vat rules.
The hmrc has provided for 14,000 classifications of goods and services that 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 www.vatcheck.com/vat subject to excise duties while almost every other imports fall under customs duties and import vat according to the goods and the country from where they arrive.
The hmrc has specified eu special territories where import vat will be levied if goods or services 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 The Channel Islands in the UK. This vat may 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 when 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 sold from our UK market. Countries such as the UK and Italy also offer special vat deferment schemes where you can get respite from import vat for up to a month by filing out a special vat form with the hmrc and opening of a special vat deferment account with them. This move would help safeguard your cash flow.
Once you start selling your goods or services in the local market then you will also need to charge any local sales vat rate to your clients. You will need 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 will allow you to concentrate 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 comparable products sold in the UK. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% which is slated to go up to 20% from January 4, 2011. Second is the lower vat rate of 5% while the third is zero vat rate. There are also certain products or services that are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK to enable you to calculate the costs with an accurate basis. You should use all legal avenues to lower your costs like vat refunds, vat deferments, etc so that you can reduce your costs further and improve the income of your 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 a competent vat agent to claim additional vat back.