If you are importing goods into the UK from specific regions of the world then you will need to pay import vat when you import goods from eu special territories or even 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 goods are then governed by 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 tobacco products along with certain activities like gambling are http://vatcheck.com/vat governed by excise duties while almost every other imports come under customs duties and import vat depending on the goods and the country from where they arrive.
The hmrc has specified eu special territories where import vat will be levied if services or goods are brought in or sent 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 when you import goods from non eu countries.
However, if you are 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 into the UK. You may also offset this vat against sales vat when the products which you have imported are offered in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where you can get respite from import vat for up to one 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.
When you start selling your goods or services from your market then you’ll also need to charge the local sales vat rate to the 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 engage the services of a proficient vat and customs agent. This may enable 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 the same as sales vat rates of comparable products available in the United Kingdom. The United Kingdom has 3 vat rate slabs. The very first is the standard 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 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 to enable you to calculate the charges with an accurate basis. You should use all legal avenues to lower your costs like vat refunds, vat deferments, etc to enable you to reduce your costs further and enhance the cash flow of your business. You need to diligently pay import vat whenever 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.