VAT and Duty on imported goods - non VAT registered business

[dandan]

Can anyone help me out with a few VAT related queries please?

 

Scenario is a UK registered company purchasing goods from a supplier in the US.

Goods are extensively modified in the UK and sold on.

UK company is not VAT registered owing to minimal turnover.

 

I'm trying to work out the legalities surrounding the payment of import duty and VAT and how this process is controlled (to avoid any items "slipping through the net" causing confusion and owed duty and VAT at a later date).

 

Questions:

1. Am I right to assume the company must pay the relevant import duty on any and all purchases coming into the UK regardless of any VAT status?

 

2. Do the "normal" duty limits apply to companies as well as individuals? What I am getting at here is that I believe there is something like a £135 limit on imported goods and up to that threshold - no duty is payable. Is that per shipment, per month, per year etc?

 

3. Does the company have to pay VAT on these items even if it is not VAT registered?

 

Many thanks

Dan

[peter richards]

im not vat registered and a sole trader , i pay the lot if i need anything from outside the uk

[ellis]

Yep - you have to cough up the VAT mate!

[Awisto]

You would still have to pay the VAT even if you were VAT registered, as you 'claim' it back.

 

I'm a VAT registered Sole Trader, I'm under the VAT threshold but chose to go VAT registered due to the line of work I'm in, as it helps with tool purchases etc.

[ilicos]

The guys above are correct.

 

VAT will be calculated and paid on the goods when clearing customs, You will then receive a Form C79 which will be made out to the business and can be used to claim the input VAT on your VAT return.

 

It may be a good idea for you to register even though you are below the threshold. If you will be making a lot of acquisitions from outside the EU, you will also be able to claim input tax on your other expenses that are incurred in processing the goods, and other overhead costs if you have any.

 

Ultimately though, you should put some figures together to help you see if it is cheaper for you to stay non-VAT registered.

 

If you need a hand PM me and I will help you.

 

Ilias

[dandan]

Thank you for all the help guys.

 

I'm chewing my way through the HMRC site info at the moment as well so I'll almost certainly be back here with more queries.

[dwayne]

 

Ultimately though, you should put some figures together to help you see if it is cheaper for you to stay non-VAT registered.

 

 

 

Ilias

 

thats good advice! i personally wish i never went VAT registered, theres nothing worse than being beaten on prices by around 17-18%

[ilicos]

thats good advice! i personally wish i never went VAT registered, theres nothing worse than being beaten on prices by around 17-18%

 

20% as of 4th January 2011.

[gjp]

I was told you add on 10% import duty and then the 17.5% VAT

[SimonB]

The rate of duty you pay depends on what it is. There are literally thousands of categories all with different rates. It varies from 0 to 15 or so % but most things are around 5%. You can look up the TARIC code somewhere on one of the government websites and find out.

 

The "allowance" before you pay is very low, it's something like £18. The £135 or whatever it is applies to personal imports I think - i.e. stuff you carry with you when you come back.

 

You pay import duty on the value of the goods plus the postage, then VAT on the total with import duty added.