Thanks for the answer but I am not sure I completely understand it :)
First does it matter that these goods do not come from the Czech Republic and have never been in the Czech Republic?
They were sent directly from China to the UK by CZsro and CZsro paid the VAT/Duty to HMRC
1. If I understand what you said correctly the CZsro will issue an invoice without charging UKltd dph/vat.
2. The CZsro can then file a VAT return to get the VAT paid when importing refunded.
3. When the UKltd files it VAT return it will need pay VAT on the imported goods.Is this correct?
OK but I am still a little confused
Lets take the following example
CZsro paid a company in china £800 for goods
CZsro paid a shipping company £200 to ship them directly from China to a UK warehouse.
CZsro paid 20% VAT and 3% Duty so .23(1000) = £230
The goods are now sitting in a UK warehouse.
CZsro now sells the goods to UKLtd for £1000. No VAT/Dph is charged on this transaction and there is no profit for CZsro
Question 1: I understand CZsro will not get the duty back but how does CZsro get the VAT it paid (£200) to HRMC back?
I am still confused how UKltd handles this transaction. Do they actually pay VAT or on their VAT return just show they owe VAT on £1000 and balance that with the VAT they collected after selling the goods at a higher price?
I think I am finally starting to understand it but I am confused about the importer
You say "but it (CZsro) does not pay the import duty and VAt, the importer does"
Who is the importer? Since CZsro paid to have delivered to a UK warehouse are they not the importer?
If the shipping company paid the VAT/duty does that make them the importer?