If your business is situated in any VAT enabled eu country or in the UK then paying applicable vat customs and excise duties is crucial for a healthy business. If you fail to pay the correct amount of duties then you could either end up inflating your business costs or end up on the wrong side of the law, in which case you could end up being penalized.
If your business involves importing goods or services into the UK then you will need to pay customs duties on the same unless they are classified as exempt from any levies. In case you are a manufacturer in the UK then the goods manufactured by your business will be subject to excise duties. Customs duties are also known as import vat in the UK and most eu countries that follow vat have somewhat similar rules while collecting duties and taxes. If you are a vat registered trader or manufacturer in the UK then you will be subject to rules stemming from the Vat Act of 1994 along with various amendments applicable over the coming years.
The HM Revenue and Customs department or hmrc department has around 14,000 classifications under which all goods and services are classified. These attract a standard vat rate of 17.5% or a reduced vat rate of 5% or attract zero vat rate. Some goods and services such as those related to children or gambling are vat exempt too. You will thus need to first confirm the correct classification of any goods or services being imported and sold in the UK by your business so that you end up paying the right amount of vat customs and excise levies over them. This can be achieved by hiring an efficient vat agent that has complete expertise in uk vat, eu vat, customs and excise rates and rules.
This move will ensure that even if any vat is paid in the country of origin over any goods or services, you can still apply for vat reclaim to recover it back into your bank account. Your vat agent can help file for a vat refund while also filing regular vat returns. This will be possible only if you have vat registration in the UK. However, you can get vat refunds only on any customs, excise or vat levies paid on goods or services that are directly related to your business. Such refunds can take up to 8 months to materialize but can surely help in improving your business cash flow in the long run.
Hmrc vat department will also monitor your vat returns that will need to mention payments and receipts of all vat amounts on a monthly, quarterly or yearly basis depending on the vat scheme chosen by you. In addition you will also need to maintain records of all customs and excise duties paid by you and will need to be produced on demand in case of an audit conducted by hmrc officers. An efficient vat agent can ensure that your business does not get interrupted due to poor maintenance of records connected to customs and excise customs vat.
If you are importing goods or services into the UK or even manufacturing them in the UK then you will surely need to ensure that you end up paying the correct rate of customs duties, excise duties or vat on them. A competent vat agent would be your greatest asset in ensuring that all your vat customs and excise duties are paid dutifully as well as proper records are maintained for the same.