If you intend to start out a business in the UK and wish to import goods into the country then you certainly must ensure you make payment for proper customs vat on imported goods so your costs satisfy your predictions. You can surely ensure improved profits if your purchase and sale price are usually in tune with all your calculations.
The hm revenue and customs department or hmrc vat department handles duties on imported goods and services into the UK, and also handles vat returns filed by vat registered traders in the united kingdom. Once your taxable sales cross 70,000 pounds in Twelve months you might need to get vat registration. Thus allows you to obtain a vat number and generate a vat invoice for each sale made in the local market. You will now need to file a vat return in the designated period and pay vat in line with the current vat rate based upon your sales.
However, before you start selling your services or goods, you might need to import them to the UK. Your goods will most probably fall under on the list of 14,000 hm customs vat classifications and you will need to pay the appropriate duties on those goods. In the event you want to import tobacco or alcohol products then you will need to pay excise duties on the same. Its thus extremely important to check on the correct classification of your goods so that you end up paying the exact level of duties specified on it instead of paying more and increasing your costs or paying less and having into trouble later on.
After you have paid all of the relevant import vat, or customs, or excise duties then you’ll also have to charge the appropriate vat rates while selling those goods locally. Your products might attract the standard vat rate of 17.5% or perhaps a reduced rate of 5% or maybe be vat exempt depending on its classification. This rate will definitely vary in other EU countries and therefore you should have up-to-date knowledge on uk vat and eu vat rates while importing or exporting your goods as well as selling them locally.
Since it might be quite challenging that you keep updating your understanding on changes happening in customs and vat rates, you should appoint a good customs and vat agent to manage your import and sales duties. Your agent would look after all paperwork in connection with customs duties, check on whether your goods are classified correctly, calculate all vat figures plus file your vat returns in time. Your agent would also be able to help you in vat registration and provide other vat services if your business has just been established.
If you plan to import goods into the UK or in any other EU country a detailed knowledge on all vat rules, customs and excise duties, and operations on vat returns is vital for healthy business growth. One mistake you could end up earning the wrath of the customs and excise vat department and put a spanner on future vat refunds. While importing goods to your country you should certainly make sure you pay proper customs vat on imported goods in order to retain complete control of your costs.