If you are importing goods to the UK from specific regions of the globe then you will have 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 at the port or airport itself and also the goods are then subject to 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 together with certain activities such as 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 will be levied if goods or services are brought in or delivered 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 also the Channel Islands in the United Kingdom. This vat will also be levied whenever you import goods from non eu vatregistrationnumber 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 if the goods that you’ve imported are sold in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where one can get respite from import vat for up to 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 services or goods from your market then you’ll also need to charge the local sales vat rate to your 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 an excellent vat and customs agent. This will 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 rate is exactly like sales vat rates of similar products sold in the UK. The United Kingdom has 3 vat rate slabs. The very first is the normal vat rate of 17.5% which is slated to go up to 20% from January 4, 2011. The second is the lower vat rate of 5% while the third is zero vat rate. There are also certain goods and services which are totally exempt from the vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the costs with an accurate basis. You should use all legal avenues to lower your costs like vat refunds, vat deferments, etc to enable you to lower your costs further and enhance the income 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.