Your profits could be severely impacted if you don’t take into account important levies that contribute to the cost of your product or service which can make it critical for you to decipher customs and excise vat duties to improve your earnings. If you wish to start a trading or manufacturing business in any EU State then it is imperative that you understand the significance of various duties whenever you import and sell your goods.
If you want to start importing services and goods to your country then you will need to pay customs duties, excise duties, or import vat on those products or services dependant upon the classification to which they fall. In case your organization is located in the UK and you intend to import goods from other EU States such as Poland, Sweden, Germany, etc a thorough understanding of uk vat is important when you start selling your goods in the local market. If your goods or services have already incurred eu vat within their home countries before you import it to the UK then you can certainly 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 within the country. Most commercial products fall in one of the 14,000 classifications specified by the customs division while many 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 your sales. Once your sales cross over the vat threshold limit of over £70,000 in the past 12 months you might have to get vat registered.
Vat registration won’t just allow you to charge vat to your clients as part of your vat invoice but also permit you to claim a vat refund if you have already paid vat in the country of origin before importing it to the UK. An experienced customs, excise and vat agent or consultant should be employed to ensure that all of your imports and vat returns are handled efficiently. There are several products that attract lower import duties and vat rates, while some will also be vat exempt. You can surely lower your product costs by slotting them within the correct category as well as claiming vat refunds well before time limit.
Failure to cover the significance of customs and excise vat duties could prove to generally be fatal to your business. You won’t just end up with higher product costs but in case you end up causing losses to the vat customs and excise department then you could be booked for fraudulently importing or selling goods or services in the UK or even in the land of origin. You could also lose out on a real vat refund if you aren’t conversant with all the latest vat rules.
When running a business, it is important to allow professionals to guide you, especially when the task involves reducing your costs legally and addressing important gov departments. It is vital that you connect with an efficient customs and excise vat consultant or agency which provides all import and vat services in one place in order to enhance your business net profit.