If you’re importing goods into the UK from specific regions of the world then you’ll have 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 the 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 which are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products vatcheck together with certain activities like gambling are subject to excise duties while almost all other imports fall 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 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 UK. This vat may 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 in case you have already paid vat on any goods in the nation of origin itself before being imported into the UK. You can also offset this vat against sales vat if the products which 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 relief from import vat for up to one month by filing out a unique 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 goods or services in the local market then you will also need to charge the 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 engage the services of a proficient vat and customs agent. This may enable 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 rate is the same as sales vat rates of similar products sold in the United Kingdom. The UK has 3 vat rate slabs. The very first is the normal vat rate of 17.5% that 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’s also certain goods and services that are totally exempt from any 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 such as vat refunds, vat deferments, etc so that you can reduce your costs further and enhance the income 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 a competent vat agent to claim additional vat back.