VAT & Commodity Code
First at all thank you very much to all of you who supported me in these early stages and answer my question.
I have got another two:
1. How much VAT do I need to charge the customers from EU and from outside? I am going to sell ex-chain store branded clothing (wholesale). I think that in this case it will be "zero rated".
2. What is the commodity code for ex-chain store branded clothing?
I would truly appreciated your help as a new business starter everything looks a bit complicated at the moment.
Thanking you in advance.
With regards to what to charge from the EU you need to get an EU form from http://customs.hmrc.gov.uk this and other import duty is provided by telephoning the Excise and Customs helpline on 0845 010 9000.
For your Ex chain store branded clothing you need to go to the www.gov.uk/finding-commodity codes. Click on Trade Tariff as there are so many codes for your particular thing, I suggest you call Tariff Classification Services on 01702366077 and to also ask them for a BTI Application Form as you have to have a written ruling Binding Tariff Information (BTI) Agreement for selling theses products.
Also make sure you have the correct and exact coding for what you are trying to sell as HMRC are quite strict and could penalize you so I also suggest that you visit www.hmrc.gov.uk/customs and look at their questions and answers.
Below is a summary of how VAT is treated with links to the relevant guidance at HMRC.
Sales to customers outside the EU: If you are making supplies of goods to customers outside of the EU – no VAT is charged. The transaction is deemed "outside the scope of EU VAT".
However – exporters must keep accurate records of their exports, including proof of export. Please see section 6 of VAT notice 703 – "VAT: Export of Goods from the United Kingdom" for further information, including what is required as "proof of Export".
Sales to VAT registered customers in the EU: If you are selling to organisations in the EU that are registered for the equivalent of VAT in their country, then you do not need to charge UK VAT – your customer will pay their rate of VAT on acquisition. However there are some guidelines that you must follow in order to do this, including putting your customers VAT number on the invoice: ttp://www.hmrc.gov.uk/vat/managing/international/exports/goods.htm#1
Sales to non – VAT registered companies or to individuals in the EU: If you are selling to individuals, or companies in the EU that are not registered for VAT, or companies that cannot provide you with a valid VAT number, then you must charge the prevailing rate of UK VAT: http://www.hmrc.gov.uk/vat/managing/international/exports/goods.htm#2
UKTI SOuth West
I thought you might be interested to hear that Open to Export are running a webinar on this topic on Friday 6th September titled, "VAT, Customs and Export Licensing".
Further details will be sent to registered users shortly so look out for these and pencil it in your diary for now.
Also, in case you hadn’t seem them these 2 videos might help: