Learning about vat customs rules can benefit your business

 

Running a business in the UK that requires importing goods can be stressful unless you know all about vat customs rules imposed by the HM Revenue and Customs department. Learning all about these rules can benefit your business as you can ensure that your purchase and sales deadlines are maintained as well as your costs are kept to the minimum.

If you import taxable goods into the UK then you will be charged import vat or customs duties. These duties need to be paid on the value of the goods and are subject to vat rules that form part of the Vat Act of 1994. The amount of customs duty to be paid is known as the “ad valorem duty” and 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 why you have chosen a particular method for the valuation of the goods that you have imported into the UK.

If you have imported goods into the UK from a eu country that has also collected vat tax from you before the goods were dispatched to the UK then you have effectively paid double the amount of tax on the same goods. If you are a vat registered trader in the UK then you can apply for vat reclaim so as to get the earlier amount back into your account. You will need to mention your vat number and provide your vat certificate to the country of origin when you file for a vat refund. Although the refund process could take between 4 to 8 months to materialize, your costs will definitely get lowered. You should employ the services of a capable vat agent that charges fees only on the amount of refunds that you receive. This move will provide an incentive for your vat agent while rewarding you with many successful vat refunds.

 

Once you have paid vat customs on your goods and start selling the same under vat invoices then you will need to maintain detailed accounts of the amount of vat paid and collected on them. You will have to mention these vat amounts during your vat returns that will need to be filed regularly based on the vat scheme that you have chosen. You should remember that any genuine mistake on your part while importing goods into the UK should be rectified as soon as possible since it could be construed as evasion of customs duties and would invoke strict action including penalties from the hmrc department. Your vat agent should have complete knowledge on customs and excise rules as well as eu vat and uk vat rules so that there are no miscalculations while importing goods into the UK.

If you are a vat registered trader in the UK that needs to import goods into the UK then you will surely need to pay all applicable customs duties on the same. However, you can also claim back vat amounts paid in the country of origin on goods and even on services that have been utilized in that country. A competent vat agent can help you decipher vat customs rules and help you get back all excess vat previously paid while also helping smooth entry of imported goods into the UK.