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 pay proper customs vat on imported goods so your costs satisfy your predictions. You can surely ensure improved profit margins if your purchase and sale price are in tune
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with your calculations.
The hm revenue and customs department or hmrc vat department handles duties on imported services and goods 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 need to get vat registration. Thus will allow you to get a vat number and generate a vat invoice for every sale made in the regional market. You’ll now need to file a vat return in the designated period and pay vat based on the current vat rate based upon 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 under one of the 14,000 hm customs vat classifications and you’ll have to pay the appropriate duties on those goods. In case you want to import tobacco or alcohol products then you’ll need to pay excise duties on the same. Its thus extremely important to check on the correct classification of your goods so you end up making payment on the exact level of duties specified on it rather than pay more and increasing your costs or paying less and having into trouble at a later date.
Once you have paid all of the relevant import vat, or customs, or excise duties then you will also need to charge the appropriate vat rates while selling those goods locally. Your products might attract the conventional vat rate of 17.5% or a lower rate of 5% or even be vat exempt depending on its classification. This rate will definitely 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 quite challenging for you to keep updating your knowledge on changes happening in customs and vat rates, make sure you appoint a good customs and vat agent to handle all your import and sales duties. Your agent would look after all paperwork in connection with customs duties, evaluate whether your goods are classified correctly, calculate all vat figures plus file your vat returns in time. Your agent would also be able to assist you in vat registration and offer other vat services if your business has just 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 operations on vat returns is critical for healthy business growth. One mistake you could end up 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 in order to retain complete control over your costs.