If you plan to start a small business in britain and want to import goods into the country then you certainly should make sure you pay proper customs vat on imported goods so that your costs satisfy your predictions. You possibly can surely ensure improved profits if your purchase and sale price are 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 also handles vat returns filed by vat registered traders in the united kingdom. Once your taxable sales cross 70,000 pounds in 12 months you might need to get vat registration. Thus will allow you to obtain a vat number and generate a vat invoice for each sale made in the local market. You’ll now ought to file a vat return at 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 might need 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 will have to pay the appropriate duties on those goods. In the event you want to import tobacco or alcohol products then you’ll have to pay excise duties on the same. It is thus extremely important to check on the appropriate 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 getting into trouble at a later date.
After you have paid all the relevant import vat, or customs, or excise duties then you’ll also need to charge the right vat rates while selling those goods locally. Your merchandise might attract the conventional vat rate of 17.5% or perhaps a lower rate of 5% or maybe be vat exempt based on its classification. This rate will definitely vary in other EU countries and thus you should 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 knowledge on changes taking place in customs and vat rates, you should 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 on time. Your agent would also be able to assist you in vat registration and provide other vat services in case your business recently been established.
If you plan to import goods into the UK or in any other 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 should certainly be sure you pay proper customs vat on imported goods so as to retain complete control over your costs.