What is the UK VAT refund? UK VAT refund review

introduce

For those who apply for a UK tax number as a person or company outside the UK, they will not incur local corporate tax, but only need to declare and pay VAT. If expenses are incurred in the UK, relevant documents can be provided as input tax deduction materials. For cross-border e-commerce sellers, the main tax refund is to offset import taxes.

Tax refund calculation

The input VAT paid by the seller for import customs clearance can offset the current output tax (provided that the seller uses his own VAT number for customs clearance and tax payment)

The amount of sales tax paid in the current period is determined by the actual sales generated by the seller in the current period.

That is: the tax to be paid = sales VAT - import VAT

Example:

The first is the VAT prepaid by the customs before FBA warehouse entry. For example, a product is shipped from China to the UK FBA warehouse, and the price declared at the UK customs is 10 pounds. At this time, the VAT that the seller needs to prepay to the customs is generally 10 pounds * 20% (the UK VAT rate is 20%) = 2 pounds. The VAT here is the prepaid VAT.

The second is the VAT collected by the seller on behalf of the government after the product is sold. When a seller sells one or more products in the UK for 20 pounds, the government will believe that the 20 pounds already includes 20% VAT, that is, 20 pounds * 20% = 4 pounds. The 4 pounds is the VAT that the government believes the seller collected from the buyer on behalf of the government.

In summary, the VAT refund that the seller needs to pay to the government = the VAT collected by the seller on behalf of the government - the prepaid VAT = 4 pounds - 2 pounds = 2 pounds.

Tax refund form

1. Refund by cheque;

2. You can keep it in your own VAT account and use it as a balance to deduct when you need to pay sales tax next time.