If you are importing goods into the UK from specific parts of the world then you'll 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 hm revenue and customs department at the port or airport itself and also the items are then subject to local sales vat rules.
The hmrc has provided for 14,000 classifications of products and services that are governed by customs duties, excise duties and import vat. Most alcohol and tobacco products along with certain activities such as gambling are vatcheck.com/vat subject to excise duties while almost all other imports come under customs duties and import vat according to the goods and also the country from which they arrive.
The hmrc has specified eu special territories where import vat will 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 United Kingdom. This vat will also be levied whenever 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 when you have already paid vat on any goods in the nation of origin itself before being imported to the UK. You may also offset this vat against sales vat when the goods that you have imported are offered in the local UK market. Countries such as the UK and Italy offer special vat deferment schemes where one can get relief from import vat for up to a month by filing out a special 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 services or goods in the local market then you will also have to charge any local sales vat rate to your clients. You will have 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 engage the services of a proficient vat and customs agent. This will enable you to focus on expanding your enterprise while all relevant paperwork and payment of taxes and duties is handled in a efficient manner.
The import vat rates are the same as sales vat rates of comparable products sold in the United Kingdom. The United Kingdom 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. The second is the lower vat rate of 5% whilst the third is zero vat rate. There's 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 so that you can calculate the costs with an accurate basis. You should use all legal avenues to lower your costs like vat refunds, vat deferments, etc so that you can lower your costs further and improve the income of your respective business. You need to diligently pay import vat when 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.