Import question

[newbie_soletrader]

Hi All,

I am shortly staring an online store, on which I plan to sell small articles imported from India.
I have a few pieces already (that I poicked up there) , and a few more that my freind shipped to me.

Another import shipment wil complete my initial inventory (this will be invoiced and imported as for commercial use)


Come tax time, how do I account for these items which I carried over and which came as gifts?
The payments for these were made in the local currency (INR) and I am not sure I have receipts for everything.

I will greatly appreciate any help regarding this.

Many thanks,
Best regards,
Rashmi

[Punched]

Hi Rashmi

First of all, you need a detailed stocktake of all your items and decide whats personal and what for business, you say you've no reciepts??, but you know the value so you'll be able to put that down as a loan to the business.

What about any Import Duty paid?? do you not have any reciepts of duty paid??

You say the final shipment will be put down to the business, so you should have all the paperwork from the import etc

Come tax time, how do I account for these items which I carried over and which came as gifts?

if you have reciepts for these then you can work out a percentage, say 70% is for resale and 30% is personal, But as you don't have much paperwork for the earlier transactions, then i wouldn't worry too much, just use the cost value as a loan to the company.

Bringing goods into the UK as gifts and then selling them on is a bit naughty, be careful

You need to make sure that, your're above board with your importing and duties paid, theres nothing worst 6 months down the line, you get a summons from HMRC for unpaid import duties. Also if the tax man ever investigates your business which they seem to do more often these days, they will want to see all the paperwork from the imports to establish if all duties have been paid.

[The Ant Can]

Hi Rashmi,

Be carful with your selling price with respect to import duties.

You need to know what class and percentage your good will attract. Go to the businesslink.gov.uk website and look at their section on international trade - they have a tarrif code finder which also gives the percentage import duty to be applied.

The import duty is applied on the landed costs of your products, so the price you paid, plus shipping etc to the UK. In my own business we always calcualte the price as a worst case scenario - so I look at purchase price, shipping AND insurance which gies me a landed cost. I then add onward shipment and VAT.

On top of this I add 10% to cover exchange rate fluctuations, bank costs etc., then I multiply this figure by the import tarrif.
Only then do I add my profit. This gives me my selling price.

I know I have added everything in and then added the tarrif (which isn't the way you have to do it) but I am looking at the worst case, and this way does improve our margins.

Hope this helps.

Gary

[vinde]

Hello,

I have been thinking about starting a business like this for a while. My problem is that I just don't know where to start. I have never run any business before. So, it is a big unknown to me.
I have been looking around to expert advice or online coaching. Do you guys know where I can find experts who I can talk to online?

Thanks

Vinde

[Indizine]

Vinde,

you need to start your own thread to ask questions so you dont hijack someone else's thread.

Thanks

[Big Pete]

Hello,

I have been thinking about starting a business like this for a while. My problem is that I just don't know where to start. I have never run any business before. So, it is a big unknown to me.
I have been looking around to expert advice or online coaching. Do you guys know where I can find experts who I can talk to online?

Thanks

Vinde

The good looking Lady is right , open up a fresh new thread ..

[vinde]

opps. sorry for that. will open a new thread.