Starting up

[rohitashwin]

Hi there, this is my first post, please help !

My cousin exports currently costume Jewellery from India to the States and wants to try and work things here.

I have received some samples from her via FEDEX who have asked me to pay VAT + Duty. Is this normal ?

Secondly having paid this to release the goods, we are looking into selling to retailers.

What is the VAT implication here ? Do i add the 17.5% to the amounts we sell ? Do we need to register as a company before this and apply for a VAT number. We are not VAT registered as yet.

Or is it up to the retailer to add VAT to the item when he sells ?

Please, any advice will be good....thanks

[DuaneJackson]

This could all be wrong, but...

YEs, it's normal to pay tax on imports.

No, you don't (and musn't) add VAT on top unless you are VAT registered here.

Same goes for the retailer when they then sell on.

[Mwebb]

I had a news letter from my accountant, and included within there was notes about buying online, from another country.

I don't have it to hand, but i believe that now if you buy goods over the value of £18 you have to pay import tax on it?

Anyone else heard about this?

[Joyous]

VAT is payable on imported goods at the same rate as if they'd been supplied within the UK, whether or not you're registered for VAT.

For goods bought over the internet, import VAT is only payable where the value of goods is at least £18.

Import duty is charged separately from VAT and you can get info on rates of duty from the Revenue's website. If you are VAT registered you can reclaim the VAT but you cannot reclaim the duty.

If you're looking to sell to retailers it might be advisable to register for VAT yourself. That way you can recover the VAT on your inputs, and as your customers are likely to be VAT registered they can recover the VAT that you charge them. You can only charge VAT on your sales if you are registered for VAT.

You do not need to form a limited company to do this although some of your customers/suppliers might prefer it if you do.

Regards

Joy

[dcaccounting]

Are you an internet based business?

If so, I would say that it is advisable to form a company if not for financial reasons purely for your own protection.

Basically your market is not just your own town, it is world wide.

If any upsets accure and sewing happens the claim would be against "the company" not you personally... that way protecting your own personal assets!

Regards

Dean

[rohitashwin]

Thanks for the replies

As the company is established in India + export to USA, is there any way of registering the same company name here ?

Joy, you metioned about recovering VAT, please can you explain that ?
I have received some samples from the USA but paid the VAT on that amount.
Are you saying that if I register for a VAT number I can get this back ?
This is initially going to be a small side business initially, so dont you need to make a certain amount of profit to become VAT registered ?


Dean, it is an internet based company at the moment geared in the US. So I could register the same company name here, thus protecting myself personally ?

Thanks once again for your help

Ro

[Joyous]

As the company is established in India + export to USA, is there any way of registering the same company name here ?
As long as there is not a UK limited company already in existence with the same name you can register a company with the same name over here.

Joy, you metioned about recovering VAT, please can you explain that ?
VAT registered businesses have to complete VAT returns, normally every quarter. You would reclaim your VAT via these VAT returns. If the VAT you are reclaiming is greater than the VAT you have charged on sales you'll get a refund of the difference.

JoyI have received some samples from the USA but paid the VAT on that amount.
Are you saying that if I register for a VAT number I can get this back ?
Provided the goods are on hand at the date of registration you can reclaim the VAT on goods acquired up to 3 years before the date of registration.

This is initially going to be a small side business initially, so dont you need to make a certain amount of profit to become VAT registered ?
You can register voluntarily as an intending trader. For businesss with annual turnover of £60,000+ it is compulsory to register.

Regards

Joy

[dcaccounting]

Dean, it is an internet based company at the moment geared in the US. So I could register the same company name here, thus protecting myself personally ?

Yes, as Joy said, as long as there is not another company in this country then it is ok to do so.

Regards

Dean