If you plan to start out a small business in the UK and wish to import goods into the country then you should make sure you pay proper customs vat on imported goods so that your costs match your predictions. You possibly 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 goods and services 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 Twelve 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 need to file a vat return at the designated period and pay vat based on the current vat rate based on your sales.
However, before you start selling your goods or services, you may want to import them to the UK. Your goods will in all probability fall into one of the 14,000 hm customs vat classifications and you’ll need to pay the suitable duties on those goods. In the event you plan to import tobacco or alcohol products then you’ll have to pay excise duties on the same. It is thus very important to be sure of the correct classification of your goods so you find yourself paying the exact amount of duties specified on it instead of paying more and boosting your costs or paying less and having into trouble at a later date.
Once you have paid all the relevant import vat, or customs, or excise duties then you will also need to charge the right vat rates while selling those goods locally. Your merchandise might attract the standard vat rate of 17.5% or perhaps a reduced rate of 5% or maybe be vat exempt based on its classification. This rate will certainly 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 very difficult for you to keep updating your understanding on changes taking place in customs and vat rates, make sure you 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 goods are classified correctly, calculate all vat figures plus file your vat returns in time. Your agent would likewise be able to help you in vat registration and offer other vat services if your business recently been established.
If you are planning to import goods into the UK or in another 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 you could end up 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 make sure you pay proper customs vat on imported goods in order to retain complete control over your costs.