If you are 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 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 goods 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 almost every other imports come under customs duties and import vat according to 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 goods or services are brought in or sent to such territories. Those are the http://vatcheck.com/vat 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 whenever you import goods from non eu countries.
However, if you’re 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 country of origin itself before being imported into the UK. You can also offset this vat against sales vat if 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 you 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 will also need to charge any local sales vat rate to the clients. You will need to make vat invoices that specifically mention vat rates as well as file regular vat returns. For those who have problem in understanding various duties and taxes imposed by the hmrc then you should engage the services of an excellent vat and customs agent. This may 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 United Kingdom. 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. Second is the reduced vat rate of 5% while the third is zero vat rate. There’s also certain products or 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 costs with an accurate basis. You should use all legal avenues to lower your costs such as vat refunds, vat deferments, etc so that you can lower your costs further and improve 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 a competent vat agent to claim additional vat back.