Recently, many customers have inquired about the UK VAT tax audit and tax payment, and most of the customers feel that the amount of tax required by the tax bureau for them to pay tax is too high, and the cost of capital is too expensive to bear the tax and tax.
Recently, Jite has successfully handled a number of tax cut cases, including helping a client fromThe 16w tax was cut to 75k tax, saving 140w RMB；So today, let's talk about how to "cut taxes" on VAT taxes in the UK.
VAT is the abbreviation of Value Added Tax (VAT), and the UK VAT applies to the conduct of production, commercial transactions and services in the UK.
Note: All enterprises engaged in cross-border e-commerce, regardless of size and year of establishment, as long as they choose the UK for warehousing, that isIf you choose a UK warehousing service, you need to register for VAT and file and pay taxes in a timely manner.
How to calculate taxes and fees for VAT payment in the UK?
Import VAT = (declared value + first-leg freight) * 20% (different tax rates for different products and different countries).
Tariff = declared value * product tax rate.
Import tax = import VAT + customs duty.
Sales VAT = After-tax sales** 6
What are the two ways to audit taxes?
[Type 1: General tax investigation].
Inspection point: The main audit is to check whether the Chinese company has made truthful declarations before Brexit on January 1, 2021.
Sales. Whether there is a corresponding C79 document to match the input tax credit.
[The second type: import tax inspection].
Inspection point: mainly check whether the customer's product enters the UK from China, whether it truthfully declares the production cost of the product**, and the quantity of the product.
This is because when products enter the UK from China, they need to pay import duties and import VAT at customs.
What are the contents of the tax audit?
1.Import duties
Import tariffs are linked to the value of the product itself, and there will be a corresponding tax rate for which type the product belongs toIf the import duty is underpaid, it needs to be supplemented to the tax bureau, and it cannot be complained about in the later stage.
2.Import VAT
If the import VAT is underdeclared, the import VAT can be paid to the tax bureau first, and then when the VAT declaration is made, it will be reflected in the VAT declaration receipt for deduction, provided that the tax is paid to the tax bureau first.
3.Deferred customs clearance
The deferred data of the application is underdeclared, and this part does not need to be actually paid, but the deferred data needs to be reflected in the VAT declaration receipt.
What should I do if I am audited?
If you receive an audit email, there are generally two ways to solve it:
The first is, dispose of it yourself;The seller will receive a message with【cfss】After receiving the email, reply to the email as soon as possible, and communicate with the tax office to confirm the final payment of taxes.
The second is:Find a regular service provider to help deal with the tax audit, and make up the tax arrears.
What should I do if the taxes are too high to be paid in time?
You can try to apply for an instalment payment by communicating with the tax office.
"Tax cut" service through regular service providers to reduce the amount of taxes and fees to be paid.
Attention is requiredThere are two situations in which the tax can no longer be cut
The first: I have contacted the tax bureau to deal with it, and the tax bureau has given the final amount that needs to be paid, and the seller has missed the best appeal period (usually after receiving the first and second emails from the tax bureau), and the tax can no longer be cut in this case.
The second: The seller contacts the tax bureau to deal with it, and the tax bureau has given the final amount that needs to be paid, and the seller has already paid the arrears in installments, so the tax cannot be cut in this case.
In other words, the conditions that need to be met to cut taxes are:The tax bureau gives the result of the tax audit, and the seller does not agree with the result, and during the appeal period, the seller will hand over the accountant to intervene in the tax audit, and then the tax can be cut.
What documents do I need to submit to cut taxes?
Amazon VAT Transaction Report, in TXT format, quarterly**.
The receipt of the UK declaration within the period under investigation.
If you have a VAT number certificate from another EU country, provide the certificate.
As a rule of thumb, the IRS will also ask for PDF summaries, quarterly** (if you can, it's best to start with the first sale).
Sometimes the tax bureau will also require to supplement the cost price of the first leg of the transfer, and you need to fill in the cost unit price of the highlighted part and the purchase currency, which will be included in the tax payment.
Tax cutting process
From 16W to 75k tax cutting case sharing
In September 2023, we received a request from a client who asked us to help him with a UK VAT audit. After understanding the specific situation of the customer in detail, we immediately arranged professional personnel to conduct the tax audit.
After the tax audit was completed, we communicated with the tax bureau and got the customerThe amount of tax that needs to be paid is more than 160,000 pounds, which is equivalent to up to 145W
The seller did not agree with the results of the tax audit, so he entrusted us to cut the tax;After obtaining accurate information, our accountant collects the information that the client needs to provide, and calculates the tax that can be cut with professional knowledge and ability and the fastest speed.
After several rounds of negotiation and communication with the tax bureau, the tax bureau agreed to our accountant's application for tax cutIn addition, our request to use a low tax rate to calculate the tax back part was also agreed.
We will inform the customer of the result of the tax cut, and from an objective point of view, we recommend that the customer pay the total amount owed in a lump sum, because:In the case of installment payments, late fees will be incurred, and choosing to pay in a lump sum can reduce the amount of accumulated late fees
Eventually, we would have paid from the customerMore than 160,000 taxes and fees were cut to 7More than 5,000 taxes and fees, saving 15,250 pounds in taxes, equivalent to 140w yuan, which is equivalent to the money of a house!
At this point, the case was successfully concluded;It not only helped customers to achieve the set goals, but also actively safeguarded the legitimate rights and interests of customers, so as to minimize the tax payment, which was well received by customers.
The above is the knowledge points related to the UK VAT and tax cuts, the seller must apply for the UK VAT when using the UK warehouse, if he does not apply for VAT, the goods are likely to be seized by the customs;At the same time, it is necessary to pay taxes and fees well to avoid overdue sales.
If you want to know more about UK VAT filing, or need tax reduction services, please contact Jite Consulting