Running 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 all about these rules may benefit your organization as you’re able ensure that your purchase and sales deadlines are maintained and your costs are kept to the minimum.
If you import taxable goods into the UK you will then be charged import vat or customs duties. These duties need to be paid on the value of the products and are subject to vat rules that form part of the Vat Act of 1994. How much customs duty to generally be paid is called the ?ad valorem duty? and then there are 6 methods that can be used to arrive at the amount of this duty. You will need to provide documentary proof to hmrc vat department as to the reasons you’ve chosen a certain way of the valuation of the goods that you’ve imported to the UK.
If you have imported goods into the UK originating 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 same goods. If you are a vat registered trader in the UK you’ll be able to make an application for vat reclaim so as to get the earlier amount back into your bank account. You will need to vat check mention your vat number and provide your vat certificate to the country of origin when you apply for a vat refund. Although the refund process might take between four to eight months to materialize, your costs will certainly get lowered. You ought to employ the services of a competent vat agent that charges fees only on the amount of refunds that you get. This move will provide an incentive for your vat agent while rewarding you with many successful vat refunds.
Once you’ve paid vat customs on the goods and start selling precisely the same under vat invoices then you’ll have to maintain detailed accounts of the amount of vat paid and collected on them. You’ll have to mention these vat amounts in 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 ought to be rectified as soon as possible as it may 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 to ensure that there aren’t any miscalculations while importing goods into the UK.
If you’re a vat registered trader in the UK that needs to import goods to the UK then you’ll surely have to pay all applicable customs duties on the same. However, you may also claim back vat amounts paid in the country of origin on goods and even on services that were utilised in that country. A reliable vat agent will help you decipher vat customs rules and help you to get back all excess vat previously paid whilst helping smooth entry of imported goods to the UK.