If you plan to start a small business in the UK and wish to import goods into the country then you certainly should make sure you make payment for proper customs vat on imported goods so that your costs satisfy your predictions. You possibly can surely ensure improved profit margins if your purchase and sale price are in tune with your calculations.
The hm revenue and customs department or hmrc vat department handles duties on imported goods and services into the UK, and in addition handles vat returns filed by vat registered traders in the country. 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 obtain a vat number and generate a vat invoice for every sale made in the local market. You will now ought 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 one of the 14,000 hm customs vat classifications and you will have to pay the appropriate duties on those goods. In the event you want to import tobacco or alcohol products then you’ll need to pay excise duties on the same. It really is thus very important to check on the appropriate classification of your goods so that you find yourself making payment on the exact level of duties specified on it rather than pay more and boosting your costs or paying less and getting into trouble later on.
After you have paid all of the relevant import vat, or customs, or excise duties then you’ll 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 perhaps a reduced rate of 5% or even be vat exempt depending on its classification. This rate will definitely vary in other EU countries and thus you ought to have up-to-date knowledge on uk vat and eu vat rates while importing or exporting your goods or even selling them locally.
Since it may be very difficult for you to keep updating your understanding on changes happening in customs and vat rates, you should appoint a good customs and vat agent to handle your import and sales duties. Your agent would look after all paperwork in connection with customs duties, evaluate whether your products 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 in case your business recently been established.
If you plan to import goods into the UK or in another EU country then a detailed knowledge on all vat rules, customs and excise duties, and procedures on vat returns is vital 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 into your country you ought to certainly be sure you pay proper customs vat on imported goods so as to retain complete control over your costs.