If you are importing goods into the UK from specific regions of the world then you’ll 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 at the port or airport itself and also the goods 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 along with certain activities such as gambling are governed by excise duties while almost every 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 services or goods are brought in or delivered 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 may also be levied when you import goods from non eu vat registration number countries.
However, if you are a vat registered trader in the United Kingdom then you can make application for a vat refund in case 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 if the goods that you have imported are sold from our UK market. Countries such as the UK and Italy offer special vat deferment schemes where you can get relief from import vat for up to 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 protect your cash flow.
When you start selling your services or goods from your market then you’ll also need to charge any local sales vat rate to your clients. You will need 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 allow you to focus on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in an efficient manner.
The import vat rates are exactly like sales vat rates of comparable products sold in the UK. The United Kingdom has 3 vat rate slabs. The very first is the standard vat rate of 17.5% that 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 are also certain products or 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 costs on an accurate basis. You should use all legal avenues to lower your costs such as vat refunds, vat deferments, etc to enable you to reduce your costs further and improve the income 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.