View the related Tax Guidance about Exports
Exporting goods ― overview
Exporting goods ― overviewFrom 1 January 2021, the physical removal of goods from Great Britain to a place outside the UK will normally be treated as an export for VAT purposes. This guidance note provides details on what requirements need to be satisfied in order for that export to be zero-rated.This note does not cover movements of goods which involve Northern Ireland. For Northern Ireland, see the Northern Ireland ― overview guidance note.For information about the VAT rules in each EU country, please refer to the VAT in the EU guidance note.For in-depth discussion of the legislation and case law in this area, see De Voil Indirect Tax Service V4.313.What are exports?The following are treated as exports:•the exporter supplies or owns goods and exports, or arranges for them to be exported, to a non-UK destination (direct export)•the exporter supplies goods to an overseas person who arranges for the goods to be exported to a non-UK destination (indirect export). An overseas person is a business or company who is not resident in the UK or a business that has no business establishment in the UK from which taxable supplies are made, or is an overseas authorityNotice 703, paras 2.4, 2.8, 2.9; VEXP20400; De Voil Indirect Tax Service V4.303The terms ‘direct exports’ and ‘indirect exports’ are explained further below. Direct exportsFrom a VAT perspective, a direct export occurs when the GB supplier sends the goods to a non-UK destination and is responsible for the transportation of those goods. The
VAT liability ― overview
VAT liability ― overviewThis guidance note provides an overview of the concept of VAT liability along with links to further practical guidance on the subject.In-depth commentary on the legislation and case law associated with VAT liability is covered in:•De Voil Indirect Tax Service V4.1 ― VAT exemption•De Voil Indirect Tax Service V4.2 ― the zero rate of VAT•De Voil Indirect Tax Service V4.4 ― the reduced rate of VATIntroduction to liabilitySupplies of goods and services which are made by taxable persons in the course of their UK business activities can be subject to one of four VAT liability treatments:•standard-rated•reduced-rated•zero-rated•exemptStandard, reduced and zero-rated supplies are often referred to collectively as ‘taxable supplies’. This distinguishes them from exempt supplies. The distinction between supplies that are taxable and supplies that are exempt is important because of its consequences for input tax recovery. VAT can generally be recovered on costs which are used to make taxable supplies. However, VAT cannot generally be recovered on costs which are used to make exempt supplies. This distinction is covered in greater detail in the Input tax ― overview and Partial exemption ― overview guidance notes. The reduced-rate, the zero-rate and exemption are sometimes referred to collectively as ‘VAT reliefs’. This is because VAT is either not chargeable on sales or is chargeable at a lower rate than the standard-rate. Despite being a ‘relief’, exemption will not necessarily be a more desirable treatment than the standard-rate because of its impact
Time of supply ― tax points in special circumstances
Time of supply ― tax points in special circumstancesThe nature of the supply can affect how the time of supply is determined. For example, there is no basic tax point for continuous supplies of services. The table below provides examples of supplies, the nature of which may affect the tax point. For detailed commentary on the tax point rules, see De Voil Indirect Tax Service V3.131 to V3.143.CircumstancesGuidanceBarristers and advocatesBarristersBuilding workLand and buildings ― building work ― invoices and authenticated receiptsCoin operated machinesVATTOS9050Continuous supplies of servicesTime of supply ― continuous supplies of
Liability ― supplies of fuel and power
Liability ― supplies of fuel and powerThis guidance note examines the liability of supplies of fuel and power.For an overview of the concept of VAT liability generally, see the Liability ― overview guidance note.For in-depth commentary on the legislation and case law on supplies of fuel and power, see De Voil Indirect Tax Service V4.406.Liability of fuel and power ― the basicsThe default position is that a supply of fuel and power will be liable to VAT at the standard-rate. However, certain supplies of fuel and power which are made for a ‘qualifying use’ (see below) are subject to the reduced-rate of VAT. The reduced-rate applies to a wide range of kinds of fuel and power including solid fuels, gases, oils, electricity, heat and air-conditioning, provided they are supplied for a qualifying use. Qualifying use includes both ‘domestic’ use and a charity’s non-business use. In this context, domestic use includes certain ‘deemed’ domestic supplies which would not be considered to be domestic in the ordinary sense of the term. For example, some supplies of fuel and power below ‘de minimis’ thresholds are deemed to be for domestic use even if the fuel and power are actually used in a commercial setting. In addition, supplies of fuel and power (which are deemed to be goods rather than services for VAT purposes) can be zero-rated when they satisfy the conditions for zero-rated exports. The zero-rate for exports is covered in the Exporting goods ― overview guidance note. Types of fuel and
Liability ― freight transport and related services
Liability ― freight transport and related servicesThis guidance note looks at the scope of VAT relief for UK supplies of freight transport and related services. It also looks at VAT relief for intermediary services connected with these kinds of supplies.For the place of supply of freight transport and related services, see the Place of supply of services ― freight transport and related services guidance note.For an overview of liability generally, see the Liability - overview guidance note.For in-depth commentary on the legislation and case law on the liability of freight transports and related services, see De Voil Indirect Tax Service V4.251.Freight transport and related services - the basicsTo the extent that freight transport takes place entirely within the UK VAT relief is not normally available and the liability of supplies will be standard-rated.However, freight transport services can be zero-rated where goods are transported from the UK to another country or vice versa. As well as applying to the transport itself, the zero-rate of VAT can apply to some ‘related’ services and to various intermediary services connected with freight transport. Due to the international nature of many freight transport services, place of supply considerations will also frequently be important to those operating in the sector. Obligations in other countries will need to be borne in mind as a resut. Such rules will not necessarily mirror UK provisions. Scope of zero-rating for freight transport servicesThe transport of goods from within the UK to a place outside the UK is zero-rated to
Economic Operator Registration and Identification Scheme (GB EORI)
Economic Operator Registration and Identification Scheme (GB EORI)This guidance note covers the GB EORI number. This is a unique number assigned by HMRC to businesses and individuals that import / export goods into or out of the UK. The GB EORI number should be used in all communications with HMRC where applicable.For information about the VAT rules in each EU country, please refer to the VAT in the EU guidance note.Who needs a GB EORI number?Any business that is involved in the import / export of goods to from Great Britain will need a GB EORI number. Persons who are not registered for VAT who import and / or export goods will still require a GB EORI number. Businesses only providing services do not require a GB EORI number. EU resident businesses that import or export goods into / out of the UK will require a GB EORI number, as an EU EORI number is not valid in the UK. A GB EORI number can only be issued to a legal person, which is:•a company•an individual•a partnership, or•a sole proprietorEXPP3060A GB EORI number cannot be allocated to individual branches or divisions within a legal entity. Only one number can be issued per legal entity. For GB EORI purposes, all members of a VAT group are treated as legal entities in their own right, but it is only group members who import or export commercial goods that will require a GB EORI number. The representative member
Retail schemes ― Daily Gross Takings (DGT)
Retail schemes ― Daily Gross Takings (DGT)All retail schemes work by applying the appropriate VAT fraction(s) to DGT that are liable to VAT at the standard or reduced rates in order to establish the amount of VAT due. It is therefore necessary for a business to keep a record of daily gross takings. This term can be misleading because, for retail scheme purposes, daily gross takings is not simply a record of payments received or cash in hand on any particular day but is a record of all of the supplies made that particular day. The record of daily gross takings can be a listing made from copies of sales vouchers but will normally be based on a till roll.This guidance note provides an overview of the items that should be included in or excluded from the DGT figures for businesses using a retail scheme.Note that the items that are included / excluded from the DGT may differ for each of the standard retail schemes so this guidance note should be used in conjunction with the Retail schemes ― Point of Sale, Retail schemes ― Apportionment and Retail schemes ― Direct Calculation guidance notes.Items that should be included in the DGTAll retail schemes require the business to keep a record of its retail sales which is called its DGT. Businesses must keep the following records from the day it starts to use the scheme:•details of all cash payments received for retail supplies (directly or via another party on
Retail schemes — Point of Sale
Retail schemes - Point of SaleThis guidance note provides an overview of the Point of Sale (POS) retail scheme requirements. This note should be read in conjunction with the following guidance notes:•Retail schemes - overview•Retail schemes - Apportionment•Retail schemes - Direct Calculation•Bespoke retail schemes•Retail schemes - specific industriesSI 1995/2518, Pt IX, regs 66–75Basic requirementsBusinesses can use the POS scheme if they:•make retail sales•are unable to account for VAT using the normal VAT accounting rules•have a total annual retail turnover, excluding VAT, of not more than £130m, and•can produce a fair and reasonable result using this schemeBusinesses are required to use the POS scheme if they meet the above requirements and they only supply goods or services that are liable to one VAT rate (eg all sales are liable to VAT at either the standard or reduced rate). If the business makes supplies that are liable to VAT at two different rates and it can identify the applicable VAT rate at the time of sale, it can choose to use the POS scheme but it is not obligatory.Can other schemes be used with the POS scheme?Provided that the business is eligible to use the schemes, it can mix the Point of Sale scheme with either a Direct Calculation or an Apportionment Scheme. However, it cannot use different versions of the Apportionment Scheme and it must not mix a Direct Calculation Scheme with an Apportionment Scheme. The retail scheme normally uses a
Liability ― charity funded equipment
Liability ― charity funded equipmentThis guidance note examines the liability of charity funded equipment. For an overview of VAT liability more broadly, see the VAT liability ― overview guidance note.For in-depth commentary on the legislation and related case law, see De Voil Indirect Tax Service V4.266A.Liability of charity funded equipment ― the basicsThere is no blanket relief from VAT for charities buying goods and services. However, there are a number of specific reliefs that can apply in particular circumstances. One relief that charities (and their suppliers) need to consider is the zero-rate for charity funded equipment. The precise scope of the relief can be relatively complex and is explored further in this guidance note. In broad (and oversimplified) terms the zero-rate can apply to certain goods and services of a medical, veterinary or scientific nature which are supplied to certain kinds of body where these goods or services are paid for using charitable or donated funds.Care should be exercised to ensure that all the conditions for relief have been met before it is claimed. In particular, a supplier should ensure that it has obtained an appropriate declaration of eligibility from its customer and performed a reasonable level of due diligence to mitigate the risk that the zero-rate is being claimed incorrectly. Obtaining this evidence and performing adequate checks should protect a supplier from being assessed for under declared VAT in the event of challenge from HMRC.Scope of zero-rate for charity funded equipmentThe zero-rate for charity funded equipment is derived
Operating the margin scheme
Operating the margin scheme This guidance note provides an overview of how the margin scheme operates. Note that there are special rules in places when a margin scheme is used in respect of:•second-hand vehicles ― see the Margin scheme ― second-hand motor vehicles guidance note•horses and ponies ― see the Margin scheme ― horses and ponies guidance note•houseboats and caravans ― see the Margin Scheme ― houseboats and caravans guidance note•items that have been pawned ― see the Margin scheme ― agents and pawnbrokers guidance note•high volume, low price items ― in this instance the Global Accounting Scheme may be used, which is a simplified version of the VAT margin scheme - see the Global accounting margin scheme guidance noteVATA 1994, s 50A; De Voil Indirect Tax Service V3.531, V3.535; SI 1992/3222, Article 2; SI 1995/1268, Article 12; FA 1995, s 24; VATMARG02000There are also different rules:•for auctioneers ― see the Margin scheme ― auctioneers guidance note•for agents see the Margin scheme ― agents and pawnbrokers guidance note•if a business buys and sells goods in Northern Ireland and the EU ― see the Margin Scheme ― Northern Ireland and imports and exports guidance noteWhen a business wishes to use the margin scheme for any of the above categories, the relevant guidance note should be read in conjunction with this guidance note.Margin scheme ― what are margin schemes?Margin schemes are an optional VAT accounting methods that can be adopted by relevant businesses.
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