If you’re importing goods into the UK from specific regions of the world then you will 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 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 that are governed by customs duties, excise duties and import vat. Most alcohol and tobacco products along with certain activities such as gambling are governed by excise duties while almost every other imports come under customs duties and import vat depending on the goods and the country from which 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. They 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 will also be levied when you import goods from non eu www.vatregistrationnumber.com countries.
However, if you’re 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 nation of origin itself before being imported into the UK. You can also offset this vat against sales vat when the products which you have imported are sold in the local UK market. Countries like the UK and Italy offer special vat deferment schemes where one can get relief from import vat for up to one month by filing out a unique vat form with the hmrc and opening of a special vat deferment account with them. This move would help protect your cash flow.
Once you start selling your services or goods from your market then you will also have to charge any 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 hire the services of an excellent vat and customs agent. This will allow you to concentrate on expanding your business 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 available in the UK. The United Kingdom has 3 vat rate slabs. The first is the normal vat rate of 17.5% which is slated to rise to 20% from January 4, 2011. The second is the reduced vat rate of 5% while the third is zero vat rate. There’s also certain products or services which 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 employ all legal avenues to reduce your costs like vat refunds, vat deferments, etc so that you can lower your costs further and enhance the cash flow of your business. You should diligently pay import vat whenever you import goods from eu special territories or from non eu countries and employ the services of an efficient vat agent to claim additional vat back.