Well there seems to be alot of questions going around about VAT and registering for VAT and such so I thought I'd write a little guide.
What is VAT?
Generally speaking, if you import anything from outwidth the EU you are eligible to pay tax on it, this tax is know as VAT ( Value Added Tax ). Goods are considered imported if they have arrived directly from outside the EC or via another EC country without being released into free circulation. When you import you'll normally have to declare any goods that you have imported to HRMC (Customs) and pay any VAT duty that is due. You can get a downloadable decleration form from
here.
What is Import Duty is it the Same as VAT?
Import duty is another fee that you may have to pay upon importing goods into the UK. Import Duty depends upon the nature of the goods, their value and the country of their origin. For details about the rates of duty applying to particular goods you can call the HM Revenue & Customs Tariff Classification Service Enquiry Line on Tel 01702 366077.
If your goods are coming from a country within the EC you do not have to pay any import duty on them. Note that, unlike VAT, duty can't be reclaimed, even if your business is VAT-registered.
How to defer Import Duty and VAT
If you import reguarly you can set up a deferment account with HMRC which will allow you to put off paying for about 30 days and your items will be released from customs much quicker. Setting up a deferment account is free but you will need your bank to guarantee you. You can read details about how to set up this account on the HMRC website.
HRMC also have a simplified Import VAT Accounting (SIVA) scheme which allows you defer import VAT without having a guarantee from your bank. There are conditions and not all businesses are eligible but you can phone the HM Revenue & Customs National Advice Service Enquiry Line on Tel 0845 010 9000 if you are interested.
Registering for VAT and Reclaiming VAT
This seems to be what is causing confusion here. You are not forced to register for Vat Unless:
At the end of any month, the total value of your taxable supplies you have made in the preceding 12 months (on a rolling 12-month basis) exceeds £61,000 (which has been the limit with effect from 1st April 2006),
Or at any time you expect that the value of your taxable supplies in the following 30 days will be more than £61,000.
If you have bought a business and you are not sure if you may be able to keep the last owner's registration number.
Registering for VAT means that you are eligible to reclaim VAT from HMRC. This claim should be made on your VAT return for the period during which the goods were imported. HM Revenue & Customs (HMRC) will send you a
C79 certificate to show what import VAT you have paid, and you will need to keep it as evidence to support your claim.
Hope this helps
Malcolm
VAT and Import Duty - Your Questions Answered
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October 2008
