Are you paying too much?
The new business secretary Sajid Javid has pledged to reduce red tape and the EU Commission has unveiled plans to cut EU regulation for traders.
This should come as a relief for anyone who deals with cross-border transactions, as the rules and requirements can be extremely burdensome. This often means that businesses miss out on the various reliefs that exist within the system.
For example if you export goods outside the EU you might well be paying too much customs duties on your imports.
If you frequently import goods from outside the EU, you will most likely be incurring customs duties. These are the EU-wide duties payable upon import, which unlike VAT are not recoverable by registered businesses, so become an additional cost of doing business internationally.
Duties can be deferred, and in some circumstances recovered in full, e.g. businesses that process and work on imported goods for subsequent re-export can apply to have customs duties suspended so that the amounts are not required to be paid at all. (Similar arrangements exist for those who export goods for processing abroad and are then re-imported).
For example, if you import parts to be installed into a machine you are producing, and then you export the machine, you can recover customs duties on the imported parts.
If you import goods which are potentially held as stock for long periods then your business’s cash-flow position could benefit from a customs warehousing arrangement so that the duty becomes payable when the goods have been sold, rather than at the time of import. Also, a deferment account can give a business up to 6 weeks to pay customs duties and import VAT without paying a freight forwarder to take care of this.
Remember HMRC will not automatically apply any reliefs – they must be specifically claimed. Some reliefs can be applied retrospectively if you have been missing out.
It’s a complex area, so speak to a specialist international tax adviser.
For more information please contact Abigail Peake on 01254 356473 or [email protected]
Source – Cassons Business Advisors