Make sure you pay proper customs vat on imported goods

If you plan to start a business in the UK and want 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 can surely ensure improved profit margins when your purchase and sale price are in tune with your calculations.

The hm revenue and customs department or hmrc vat department handles duties on imported goods and services into the UK, and also handles vat returns filed by vat registered traders in the country. Once your taxable sales cross 70,000 pounds in 12 months then you may need to get vat registration. This in turn will allow you to get a vat number and generate a vat invoice for each 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 might need to import them into the UK. Your goods will most probably fall into one of the 14,000 hm customs vat classifications and you will need to pay the appropriate duties on those goods. In case you plan to import tobacco or alcohol products then you will need to pay excise duties on the same. It is thus very important to check on the appropriate classification of your goods so that you end up paying the exact amount of duties specified on it instead of paying more and boosting your costs or paying less and getting 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 appropriate vat rates while selling those goods locally. Your products might attract the standard vat rate of 17.5% or a reduced rate of 5% or even be vat exempt based on its classification. This rate will certainly 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 or even 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 handle all your import and sales duties. Your agent would take care of all paperwork related to customs duties, check on whether your goods are classified correctly, calculate all vat figures and also file your vat returns on time. Your agent would also be able to help 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 any other EU country then a detailed knowledge on all vat rules, customs and excise duties, and procedures on vat returns is vital for healthy business growth. One mistake could result in earning the wrath of the customs and excise vat department and put a spanner on future vat refunds. While importing goods into your country you should certainly make sure you pay proper customs vat on imported goods so as to retain complete control over your costs.