If you are importing goods into the UK from specific regions of the world then you’ll have 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 hm revenue and customs department at the port or airport itself and the items are then subject to 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 such as gambling are governed by excise duties while almost all other imports fall 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 will be levied if goods or services are brought in or delivered to such territories. Those are the www.vatcheck.com/vat 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 United Kingdom. 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 you’ll be able to 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 into the UK. You may also offset this vat against sales vat when the goods that you’ve imported are offered from our UK market. Countries like the UK and Italy offer special vat deferment schemes where you can get relief from import vat for up to one 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 safeguard your cash flow.
When you start selling your goods or services from your market then you’ll also need to charge any local sales vat rate to the clients. You will need to make vat invoices that specifically mention vat rates and also 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 may enable 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 exactly like 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 go up to 20% from January 4, 2011. 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 any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods to the UK so that you can calculate the costs on an accurate basis. You should use 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 business. You need to diligently pay import vat whenever 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.