Operating a business in the UK that requires importing goods can be stressful unless you know about vat customs rules imposed from the HM Revenue and Customs department. Learning about these rules can benefit your business as you can ensure that your purchase and sales deadlines are maintained and your cost is kept to the minimum.
If you import taxable goods to the UK then you will be charged import vat or customs duties. These duties need to be paid on the valuation of the products and they are governed by vat rules that form part of the Vat Act of 1994. How much customs duty to be paid is called the ?ad valorem duty? and then there are 6 methods you can use https://vatvalidation.com/vat to reach the amount of this duty. You will have to provide documentary proof to hmrc vat department as to the reasons you’ve chosen a particular way of the valuation of the products which you’ve imported into the UK.
In case you have imported goods into the UK from a eu country which has also collected vat tax from you prior to goods were dispatched to the UK then you have effectively paid double tax on the very same goods. If you’re a vat registered trader in the UK you’ll be able to make an application for vat reclaim so as to get the previous amount back into your bank account. You will have to mention your vat number and provide your vat certificate to the country of origin whenever you file for a vat refund. Although refund process could take between four to eight months to materialize, your costs will certainly get lowered. You ought to employ the expertise of a capable vat agent that charges fees only on the volume of refunds that you get. This move will give you a reason to your vat agent while rewarding you with many successful vat refunds.
Once you have paid vat customs on the goods and begin selling the same under vat invoices then you will need to maintain detailed accounts of the amount of vat paid and collected built in. You’ll have to mention these vat amounts during your vat returns that will need to be filed regularly based on the vat scheme that you have chosen. Remember that that any genuine mistake on your part while importing goods into the UK should be rectified as quickly as possible since it could be construed as evasion of customs duties and would invoke strict action including penalties from the hmrc department. Your vat agent must have complete knowledge on customs and excise rules as well as eu vat and uk vat rules so that there aren’t any miscalculations while importing goods to the UK.
If you’re a vat registered trader in the UK that must import goods to the UK then you’ll surely have to pay all applicable customs duties on the same. However, you may also reclaim vat amounts paid in the nation of origin on goods and even on services that were utilized in that country. A competent vat agent can help you decipher vat customs rules and help you get back all excess vat previously paid whilst helping smooth entry of imported goods into the UK.