If you plan to start out a business in britain and want to import goods to the country then you certainly should make sure you pay proper customs vat on imported goods so that your costs match your predictions. You can surely ensure improved profit margins if your purchase and sale price are 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. As soon as your taxable sales cross 70,000 pounds in 12 months then you may have to get vat registration. This in turn allows you to get a vat number and generate a vat invoice for each sale made in the regional market. You’ll now ought to file a vat return in the designated period and pay vat in line with the current vat rate based upon the sales.
However, before you start selling your goods or services, you may want to import them into the UK. Your goods will in all probability fall under on the list of 14,000 hm customs vat classifications and you will have to pay the appropriate duties on those goods. In case you want to import tobacco or alcohol products then you will need to pay excise duties on the very same. It is thus very important to be sure of the appropriate classification of your goods so you end up paying the exact amount of duties specified on it instead of paying more and boosting your costs or paying less and having into trouble later on.
After you have paid all the relevant import vat, or customs, or excise duties then you will also have to charge the right vat rates while selling those goods locally. Your products might attract the conventional vat rate of 17.5% or a reduced rate of 5% or maybe be vat exempt based on its classification. This rate will definitely vary in other EU countries and thus 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 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 manage all your import and sales duties. Your agent would look after all paperwork related to customs duties, evaluate whether your products are classified correctly, calculate all vat figures and also file your vat returns on time. Your agent would also be able to assist you in vat registration and offer other vat services in case your business has just been established.
If you plan to import goods to the UK or in another EU country a detailed knowledge on all vat rules, customs and excise duties, and procedures on vat returns is critical for healthy business growth. One mistake could result in 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 ought to certainly be sure you pay proper customs vat on imported goods so as to retain complete control of your costs.