If you are importing goods to the UK from specific parts of the world then you’ll have 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 at 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 products and services which are governed by customs duties, excise duties and import vat. Most alcohol and cigarettes and tobacco products together with certain activities like gambling are subject to excise duties while almost all other imports come under customs duties and import vat according to the goods and also the country from where 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. They are The vat check 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 United Kingdom. This vat will also be levied when you import goods from non eu countries.
However, if you’re a vat registered trader in the UK you’ll be able to apply for a vat refund when you have already paid vat on any goods in the nation of origin itself before being imported to the UK. You can also offset this vat against sales vat when the products which you’ve imported are offered from our UK market. Countries like the UK and Italy also offer special vat deferment schemes where one can get relief from import vat for approximately a month by filing out a special 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 have 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. 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 enable you to focus on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rate is the same as sales vat rates of similar products sold in the UK. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% which is slated to go up to 20% from January 4, 2011. The second is the reduced vat rate of 5% whilst the third is zero vat rate. There are also certain goods and services which are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK so that you can calculate the charges with an accurate basis. You should employ all legal avenues to reduce your costs like vat refunds, vat deferments, etc to enable you to reduce your costs further and enhance the income of your respective 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.