If you are importing goods into the UK from specific parts of the world then you will have to pay import vat whenever 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 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 tobacco products along with certain activities like gambling are subject to excise duties while http://vatvalidation.com/vat almost all other imports come under customs duties and import vat according to the goods and 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 will also be levied when you import goods from non eu 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 country 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 offered from our UK market. Countries such as the UK and Italy also offer special vat deferment schemes where you can get respite from import vat for approximately a month by filing out a unique vat form with the hmrc and opening of an special vat deferment account with them. This move would help protect your cash flow.
Once you start selling your goods or services in the local market then you will also have 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. For those who have problem in understanding various duties and taxes imposed by the hmrc then you definately should hire the services of an excellent vat and customs agent. This may enable 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 rate is the same as sales vat rates of similar products available in the United Kingdom. The UK has 3 vat rate slabs. The very 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% whilst the third is zero vat rate. There’s also certain goods and services that are totally exempt from the vat.
You ought to 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 lower your costs such as 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 when you import goods from eu special territories or from non eu countries and use the services of an efficient vat agent to claim additional vat back.