Understanding vat customs rules can benefit your business

Operating a business in the UK that needs importing goods is usually stressful unless you know about vat customs rules imposed from the HM Revenue and Customs department. Learning about these rules may benefit your business as you’re able ensure that your purchase and sales deadlines are maintained and your costs are kept to the minimum.

In case you import taxable goods to the UK then you will be charged import vat or customs duties. These duties need to be paid on the value of the products and they are governed by vat rules that form part of the Vat Act of 1994. How much customs duty to be paid is called the ?ad valorem duty? and then there https://vatvalidation.com/vat are 6 methods you can use to arrive at the amount of this duty. You will have to provide documentary proof to hmrc vat department as to the reasons you have chosen a particular method for the valuation of the products which you’ve imported into the UK.

In case you have imported goods into the UK originating from a eu country that 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’re a vat registered trader in the UK you’ll be able to apply for vat reclaim so as to get the previous amount back to your bank account. You will have to mention your vat number and provide your vat certificate to the country of origin whenever you apply for a vat refund. Although the refund process might take between four to 8 months to materialize, your costs will certainly get lowered. You should employ the services of a competent vat agent that charges fees only on the volume of refunds that you receive. This move will provide an incentive for your vat agent while rewarding you with lots of successful vat refunds.

Once you have paid vat customs on your goods and start selling the same under vat invoices then you’ll need to maintain detailed accounts of the amount of vat paid and collected on them. You will have to mention these vat amounts in your vat returns which will need to be filed regularly based on the vat scheme that you have chosen. You should remember that any genuine mistake by you while importing goods to the UK should be rectified as quickly 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 should have complete knowledge on customs and excise rules along with eu vat and uk vat rules to ensure that there aren’t any 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’ll surely need to pay all applicable customs duties on the same. However, you can also reclaim vat amounts paid in the nation of origin on goods and also on services that have been utilised in that country. A competent 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.