Public services benefit from collections of hm revenue & customs

When you import goods or services into the UK or even sell them in the UK market then you need to pay duties and taxes since public services benefit from collections of hm revenue & customs. This department collects almost around 17 billion pounds every year as taxes and duties which are then spent on strengthening public services in the country.

When you import goods or services to resell in local markets or re-export out of the UK, you will need to pay customs duties or excise duties or import VAT on the same. Even if you import capital goods for your manufacturing unit or import spares for your machinery, you will still need to pay appropriate duties. When you sell your goods or services and earn profits on the same then you also need to pay income tax or capital gains tax on those earnings. All these taxes and duties need to be managed by an agency and the money collected has to reach back to the public in the form of vital funds, and it is precisely for this purpose that the hm revenue & customs was created.

The merger of the Customs and Excise Department with the Inland Revenue Department in 2005 led to the creation of the HM Revenue and Customs Department. Since the UK has adopted vat or value added tax along with several other eu countries such as Spain, Sweden, Italy, Germany, Greece, Hungary, Poland, among others, the vat chain will continue even when you imports goods or services from these countries. Thus, although you will certainly need to pay the appropriate customs or excise duties or even import vat on your imports, any vat paid before the goods reached UK shores could be claimed back from the original country.

However, you can enjoy all benefits of vat only when you are a vat registered trader in the UK. You can also get vat registration in other countries as a foreign country depending on their vat rules. You can now apply for vat refunds for vat already paid in the original country. You will also need to charge sales vat to your local customers by mentioning the exact vat rate and amount in your vat invoice. You will also need to file your vat returns to the revenue department at prescribed intervals.

On its part, the hm revenue & customs department not only collects various duties and taxes such as customs and excise duties, vat, income tax, capital gains tax, inheritance tax, corporation tax, stamp duty land tax, etc but also manages pensions, child benefit and child trust funds. This department also administers border and frontier protection, national minimum wage enforcement and manages environmental taxes. In short, the money paid by the public in the form of taxes and duties ultimately reaches back to the public.

You will certainly need to pay all your duties and taxes to the relevant departments while also maintaining a detailed record of the same. However, in case you are a vat registered trader then this will also allow you to track and claim back vat refunds so as to prevent double taxation and lower your costs. Anyway, if you pay your due duties and taxes on time then it is public services that will benefit from collections of hm revenue & customs.

Leave a Reply