If you’re importing goods into the UK from specific parts of the world then you will 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 the items 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 tobacco products together with certain activities like gambling are http://vatcheck.com/vat subject to 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 services or goods are brought in or sent 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 The Channel Islands in the UK. This vat may also be levied when you import goods from non eu countries.
However, if you are a vat registered trader in the UK then you can apply 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 can also offset this vat against sales vat when the goods that you have imported are sold in the local UK market. Countries such as the UK and Italy also offer special vat deferment schemes where you can get respite from import vat for up to a 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 safeguard your cash flow.
When you start selling your goods or services in the local market then you will also need to charge the local sales vat rate to the 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 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 the same as sales vat rates of comparable products sold in the UK. The UK has 3 vat rate slabs. The very first is the standard vat rate of 17.5% that is slated to go up to 20% from January 4, 2011. Second is the reduced vat rate of 5% whilst the third is zero vat rate. There are also certain goods and services that are totally exempt from any vat.
You should have sufficient knowledge on various duties and taxes applicable on imported goods into the UK to enable you to calculate the charges 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 lower 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 employ the expertise of a competent vat agent to claim additional vat back.