Your profit margins could be severely impacted if you don’t take into account important levies that play a role in the cost of your product or service which makes it critical for that you decipher customs and excise vat duties to enhance your earnings. If you want to begin a trading or manufacturing business in a EU State then it is vital that you comprehend the significance of various duties whenever you import and sell your goods.
If you want to start importing services and goods into your country then you will have to pay customs duties, excise duties, or import vat on those products or services depending on the classification under which they fall. If your business is located in the UK and you also intend to import goods from other EU States such as Poland, Sweden, Germany, etc then a thorough understanding of uk vat is important when you start selling your goods in the local market. If your goods or services already have incurred eu vat within their home countries before you import it to the UK then you can apply for vat reclaim in those countries in order to lower your product costs and prevent double taxation.
In the UK, it’s the hm customs and excise department that handles all matters related to customs and excise vat on products and services imported and sold inside the country. Most commercial products fall inone of several 14,000 classifications specified by the customs division while most tobacco and alcohol products will attract excise duties. Many products also attract import vat while being imported to the UK. Most products also attract sales vat or value added tax when they’re sold locally and it’s also the hm revenue and customs department that’ll be tracking the sales. As soon as your sales go over the vat threshold limit of more than £70,000 in the past 12 months then you may need to get vat registered.
Vat registration will not only allow you to charge vat to the clients in your vat invoice but additionally permit you to claim a vat refund if you have already paid vat in the country of origin before importing it to the UK. A skilled customs, excise and vat agent or consultant ought to be employed to ensure that all of your imports and vat returns are handled efficiently. There are numerous products that attract lower import duties and vat rates, while many will also be vat exempt. It is possible to surely lower your product costs by slotting them within the correct category as well as claiming vat refunds prior to the time limit.
Failure to cover the importance of customs and excise vat duties could prove to be fatal to your business. You will not only end up with higher product costs but in case you end up causing losses to the vat customs and excise department then you may be booked for fraudulently importing or selling goods or services in the UK or even in the country of origin. You might lose out on a legitimate vat refund if you are not conversant with all the latest vat rules.
When operating a business, it is essential to allow professionals to guide you, especially when the task involves lowering your costs legally and addressing important government departments. It is very important that you just tie up with the efficient customs and excise vat consultant or agency which provides all import and vat services in one place so as to improve your business net profit.