What is an import VAT?

All goods that enter the country (UK) have to pay import VAT for customs clearance.

If you are VAT registered (which you wouldn't be until you reach a certain level of sales), you charge VAT on the sale of your goods. Every quarter (3 months) you then account for VAT.

Take all of the chargeable amounts that you collected during that quarter minus any VAT that you paid to suppliers or import VAT. This is now the amount that you owe for VAT.

Example - Import £20k of goods (Import VAT will be £4k) , Sell £50k of goods (VAT inclusive is £8333) , therefore you would owe the VAT of £8333 - £4000 = £4333

You would then effectively have paid out original import VAT of £4 + a return of £4333 = £8333

Non VAT Registered

Pay Import VAT - Based on 20% of your goods cost value

Do not charge VAT on Sales

Do not account for VAT to the government

Example - Import £20k of goods (Import VAT will be £4k) , Sell £50k of goods (No VAT charged) , therefore you would owe the VAT £0You would then effectively have paid out original import VAT of £4 only = £4000

Being non VAT Registered will save you a fortune (over $15000 in the first year actually) Once you hit over £82k in one year you must register for VAT

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