Which indirect tax is typically applied on overseas goods entering the UK?

Which indirect tax is typically applied on overseas goods entering the UK?

• A. VAT
• B. Excise Duty
• C. Customs Duty
• D. Sales Tax

Answer: (C)

Customs Duty is the correct response because it specifically pertains to taxes imposed on goods imported into a country. In the context of overseas goods entering the UK, Customs Duty ensures that tariffs are applied, reflecting trade policies and regulations. This duty is calculated based on the customs value of the imported goods, which includes the price paid for the goods, shipping, and insurance costs up to the point of entry into the UK. Value Added Tax (VAT), while also applicable to goods entering the country, is based on the sale price and doesn't specifically target goods at the border prior to their entry; rather, it applies once the goods are in circulation. Excise Duty pertains primarily to specific goods like alcohol, tobacco, and fuel, while Sales Tax is not a term commonly used within the UK tax system, as VAT serves a similar function. Hence, Customs Duty is the most accurate tax associated with the importation of overseas goods into the UK.

Customs Duty is the correct response because it specifically pertains to taxes imposed on goods imported into a country. In the context of overseas goods entering the UK, Customs Duty ensures that tariffs are applied, reflecting trade policies and regulations. This duty is calculated based on the customs value of the imported goods, which includes the price paid for the goods, shipping, and insurance costs up to the point of entry into the UK.

Value Added Tax (VAT), while also applicable to goods entering the country, is based on the sale price and doesn't specifically target goods at the border prior to their entry; rather, it applies once the goods are in circulation. Excise Duty pertains primarily to specific goods like alcohol, tobacco, and fuel, while Sales Tax is not a term commonly used within the UK tax system, as VAT serves a similar function. Hence, Customs Duty is the most accurate tax associated with the importation of overseas goods into the UK.