Q: If I want to import zero VAT rated goods, will I still have to pay import taxes on them? Where can I find more information about this?
Apr 22 2008
Answered by: Clive Lewis Ask a question
The following is an extract from the Business Link “Imports and acquisition proceedures” publication. The full publication contains a list of useful contact telephone numbers and websites with further information.
VAT and duty on imports
If you want to move goods into the UK, you will have to understand how various payments are calculated and how they are paid. The classification and origin of the goods will affect the amount of import duty and VAT you pay.
The most useful reference is a customs handbook called the Tariff which is used to help classify goods and gives you the information you need for importing and exporting goods in or out of the UK.
It also contains the commodity codes and procedures that will enable you to complete your Single Administrative Document (SAD) for importing and exporting goods.
To classify goods, you'll need a Commodity Code so that customs can apply the correct rates of duty and VAT. These are listed in Volume 2 of the Tariff.
Your SAD must also show the accurate value of your imports. This value is used to calculate any duty or VAT liability. If your invoice is in a foreign currency the invoice value has to be converted to sterling.
If you import from certain countries outside the European Union (EU), you may be able to benefit from Import Preference. This scheme allows you to import goods originating from these countries with a reduced or nil import duty rate. You must show that the goods have originated in a country with preferential import status. Proof of preferential origin is issued in the country of origin and submitted in the country of import.
You may have to pay additional duties in some instances. One instance of an additional duty is where the EU decides that products from certain countries are being sold at such a low price as to be damaging to an EU industry.
Import charges should be paid following certain procedures, and the most efficient of these is the Deferment Account for both collection and clearance of goods.
A deferment account lets users defer paying the importation levies until a prescribed payment day. To open an account you'll need to supply financial security to cover every sum you defer up to an overall maximum amount in any calendar month. Your agent can also use a deferment account on your behalf.
VAT may not need to be fully secured if you use a Customs approved Simplified Import VAT Accounting (SIVA) scheme.
You will probably be using the services of a freight forwarding agent and it would be helpful to talk to them as they will be able to provide further practical information.
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