If you intend to start a business in britain and wish to import goods to the country then you should make sure you make payment for proper customs vat on imported goods so your costs match your predictions. You can surely ensure improved profit margins 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 services and goods in the UK, and in addition handles vat returns filed by vat registered traders in the country. Once your taxable sales cross 70,000 pounds in 12 months you might have to get vat registration. This in turn allows you to obtain a vat number and generate a vat invoice for each sale made in the regional market. You’ll now need to file a vat return at the designated period and pay vat based on the current vat rate based upon the sales.
However, before you begin selling your goods or services, you might need to import them into the UK. Your goods will most probably fall into on the list of 14,000 hm customs vat classifications and you will need to pay the appropriate duties on those goods. In case you plan to import tobacco or alcohol products then you’ll need to pay excise duties on the same. It really is thus extremely important to check on the appropriate classification of your goods so that you end up making payment on the exact amount of duties specified on it rather than pay more and increasing your costs or paying less and getting into trouble at a later date.
After you have paid all of the relevant import vat, or customs, or excise duties then you will also need to charge the appropriate vat rates while selling those goods locally. Your merchandise might attract the conventional vat rate of 17.5% or a lower rate of 5% or even be vat exempt based on its classification. This rate will definitely vary in other EU countries and therefore you ought to 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 for you to keep updating your understanding on changes taking place in customs and vat rates, you should appoint a capable customs and vat agent to handle your import and sales duties. Your agent would look after all paperwork related to customs duties, check on whether your goods are classified correctly, calculate all vat figures plus file your vat returns in time. Your agent would likewise be able to assist you in vat registration and offer 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 critical for healthy business growth. One mistake could result in earning the wrath of your 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 so as to retain complete control over your costs.