If you’re importing goods into the UK from specific parts of the globe then you’ll 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 also the goods are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services which are subject to 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 http://vatvalidation.com/vat almost every other imports come under customs duties and import vat depending on 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 delivered 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 UK. This vat will also be levied whenever you import goods from non eu countries.
However, if you are a vat registered trader in the United Kingdom you’ll be able to make application 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 may also offset this vat against sales vat if the products which you have imported are sold 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 approximately 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.
When you start selling your services or goods from your market then you will also have to charge the local sales vat rate to your clients. You will have to make vat invoices that specifically mention vat rates and also file regular vat returns. If you 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 will allow you to concentrate on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rates are the same as sales vat rates of similar products sold in the United Kingdom. The UK has 3 vat rate slabs. The 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% while the third is zero vat rate. There’s also certain products or services that are totally exempt from the vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to 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 to enable you to reduce your costs further and improve the cash flow of your respective business. You need to diligently pay import vat when 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.