Hope someone can give me an accurate answer.
Because even after reading some articles on the HRMC website, I really still can’t understand how to calculate import VAT.
I want to import goods from Asia into UK. However, there is a problem that I don't quite understand how import VAT is calculated.
Before I go any further, I want to say that I have read this article:
I know that: import Duty = Goods CIF Value x Duty rate.
Goods CIF Value = Goods Value + Sea Freight Cost + Insurance Cost.
But when it comes to Import VAT, I'm not sure whether it also include Customs clearance fees and Container tailer transport cost within UK..
I saw calculating formula from some articles of shipping companies like this:
Import VAT = ( CIF Value + Duty ) x VAT Rate
Ok, It's easy to understand for me. (But, is this too simple? I'm not sure..)
On the other hand, I also checked some articles from some other UK shipping companies, the cost of transport within the UK should also be added into import VAT.
So, my question is:
1. import VAT = ( CIF Value + Duty + Customs Clearance Fees + Container inland transport cost ) x VAT Rate
2. import VAT = ( CIF Value + Duty + Customs Clearance Fees ) x VAT Rate
3. import VAT = ( CIF Value + Duty ) x VAT Rate
Which calculating formula do you think is correct?
For "Container inland transport cost", I mean the container trailer freight that transported from Customs to our company's warehouse within UK.
For VAT Rate, I know it's 20% generally with some exceptions.
I do appreciate for your help. Thank you!