Operating a business in the UK that requires importing goods is usually stressful unless you know all about vat customs rules imposed from the HM Revenue and Customs department. Learning all about these rules can benefit your organization as you’re able ensure that your purchase and sales deadlines are maintained and your cost is kept to the minimum.
In case you import taxable goods into the UK you will then be charged import vat or customs duties. These duties have to be paid on the value of the goods and are governed by vat rules that form part of the Vat Act of 1994. How much customs duty to generally be paid is called the ?ad valorem duty? and there are 6 methods that can be used to arrive at the amount of this duty. You will need to provide documentary proof to hmrc vat department as to why you’ve chosen vat check a certain method for the valuation on the products which you’ve imported into the UK.
In case you have imported goods into the UK from a eu country which has also collected vat tax from you before the goods were dispatched to the UK then you’ve effectively paid double tax on the very same goods. If you’re a vat registered trader in the United Kingdom you’ll be able to make an application for vat reclaim to get the earlier amount back into your bank account. You will have to mention your vat number and provide your vat certificate to the country of origin whenever you file for a vat refund. Although the refund process might take between four to 8 months to materialize, your costs will certainly get lowered. You should employ the expertise of a capable vat agent that charges fees only on the volume of refunds that you receive. This move will give you an incentive to your vat agent while rewarding you with many successful vat refunds.
Once you have paid vat customs on the goods and begin selling the same under vat invoices then you will have to maintain detailed accounts of the amount of vat paid and collected built in. You’ll have to mention these vat amounts in your vat returns which will have to be filed regularly in line with the vat scheme which you have chosen. You should remember that any genuine mistake by you while importing goods into the UK should be rectified as soon as possible as it could be construed as evasion of customs duties and would invoke strict action including penalties from the hmrc department. Your vat agent must have complete knowledge on customs and excise rules along with eu vat and uk vat rules so that there aren’t any miscalculations while importing goods into the UK.
If you are a vat registered trader in the United Kingdom that needs to import goods to the UK then you will surely need to pay all applicable customs duties on the very same. However, you may also claim back vat amounts paid in the country of origin on goods and even on services that were utilised in that country. A competent vat agent can help you decipher vat customs rules and help you get back all excess vat previously paid whilst helping smooth entry of imported goods to the UK.