If you intend to start a small business in britain and want to import goods to the country then you certainly should make sure you make payment for proper customs vat on imported goods so that your costs match your predictions. You can surely ensure improved profit margins if your purchase and sale price are usually in tune with your calculations.
The hm revenue and customs department or hmrc vat department handles duties on imported services and goods in the UK, and in addition handles vat returns filed by vat registered traders in the united kingdom. Once your taxable sales cross 70,000 pounds in Twelve months then you may have to get vat registration. Thus allows you to obtain a vat number and generate a vat invoice for each sale made in the local market. You will now ought to file a vat return at the designated period and pay vat based on the current vat rate based upon your sales.
However, before you begin selling your services or goods, you may want to import them into the UK. Your goods will in all probability fall into on the list of 14,000 hm customs vat classifications and you’ll have to pay the suitable duties on those goods. In the event you want to import tobacco or alcohol products then you will have to pay excise duties on the very same. It really is thus extremely important to check on the correct classification of your goods so you find yourself paying the exact level of duties specified on it instead of paying more and increasing your costs or paying less and getting into trouble later on.
Once you have paid all the relevant import vat, or customs, or excise duties then you will also have to charge the appropriate vat rates while selling those goods locally. Your products might attract the standard vat rate of 17.5% or perhaps a reduced rate of 5% or maybe be vat exempt depending on its classification. This rate will certainly vary in other EU countries and thus you should have up-to-date knowledge on uk vat and eu vat rates while importing or exporting your goods as well as selling them locally.
Simply because it might be very difficult for you to keep updating your knowledge on changes taking place in customs and vat rates, you should appoint a good customs and vat agent to handle all your import and sales duties. Your agent would look after all paperwork related to customs duties, check on whether your products are classified correctly, calculate all vat figures and also file your vat returns in time. Your agent would also be able to help you in vat registration and provide other vat services in case your business recently been established.
If you are planning to import goods to the UK or maybe in any other EU country then a detailed knowledge on all vat rules, customs and excise duties, and procedures on vat returns is vital for healthy business growth. One mistake you could end up earning the wrath of your customs and excise vat department and put a spanner on future vat refunds. While importing goods into your country you ought to certainly make sure you pay proper customs vat on imported goods so as to retain complete control over your costs.