If you are importing goods to the UK from specific regions of the globe then you'll 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 the hm revenue and customs department on 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 goods and services that are governed by customs duties, excise duties and import vat. Most alcohol and tobacco products together with certain activities like gambling are subject to excise duties while www.vatvalidation.com/vat almost every other imports fall under customs duties and import vat depending on the goods and also the country from which 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 The Channel Islands in the United Kingdom. This vat will also be levied when you import goods from non eu countries.
However, if you're a vat registered trader in the UK then you can apply for a vat refund when 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 if the goods that you have imported are sold from our UK market. Countries such as the UK and Italy also offer special vat deferment schemes where one can get relief from import vat for approximately a month by filing out a special vat form with the hmrc and opening of an special vat deferment account with them. This move would help safeguard your cash flow.
Once you start selling your goods or services in the local market then you will also have to charge the local sales vat rate to your 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 engage the services of a proficient vat and customs agent. This may allow 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 rates are exactly like sales vat rates of comparable products available 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 rise to 20% from January 4, 2011. Second is the reduced vat rate of 5% while the third is zero vat rate. There are also certain products or services which are totally exempt from any vat.
You ought to have sufficient knowledge on various duties and taxes applicable on imported goods to the UK to enable you to calculate the charges with an accurate basis. You should use all legal avenues to reduce your costs such as vat refunds, vat deferments, etc to enable you to reduce your costs further and improve 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 expertise of a competent vat agent to claim additional vat back.