whats going on with VAT and European Law , goods Uk to outside EU?

Question posted by andrew brookes, on behalf of GinBrookes in SS2

Can anybody explain in simple terms how I can legally avoid paying VAT when I buy goods which will be shipped to Africa. There was a time I understand, when it was a simple case of when buying goods from suppliers in the U.K to arrange to delivering to your shipper and the supplier would waiver the VAT.One supplier quoted me this link :
http://www.allstores-clothing.com/vat-tax

I just don't understand the "WAR & PEACE" offerings of the HMRC due to dyslexia

Posted:
Report inappropriate content

Hello Andrew,
First you have to decide if you are buying as a tax registered UK company or an individual. The rules are different.

Assuming you are buying as a UK tax registered company from a UK tax registered supplier -
The supplier can zero rate (not charge) UK VAT if the goods are to be exported. However, to do this he will need proof of export and might doubt that you will provide it and so will refuse to sell without charging VAT. There are many types of document that form proof of export but an airwaybill and a copy customs export entry would be acceptable. It is not enough to have the goods delivered to a freight agent or shipping company. If you pay the VAT to the supplier you may be able to recover or offset it through your usual business accounts - you need to check with your accountant. In which case paying the VAT to the supplier will simply become a cash flow matter rather than a final expense. You do not need to charge UK VAT to your African customer as you will get proof of export as you are arranging the shipping.

If you are purchasing as an individual you will be charged VAT if you are an EU citizen or are a non-EU citizen but you are domiciled in UK for tax purposes. If you are a non-EU citizen you can buy without paying VAT if you are taking the purchased items out of the EU within 3 months. Depending on the scheme the supplier is running you may have to pay the VAT and recover it at the airport of departure from the EU - this is the so called 'VAT free' scheme.

I hope this helps. Let me know if you have further questions - either directly enquiries@morley-consulting.co.uk or 0784 1133027 or via Open to Export.
Regards,
Susan

Posted:
Report inappropriate content

Fiona Johnson, on behalf of Vellag Ltd in SP3.

You can't is the short answer. If you are purchasing in the UK and you are a UK registered company then you have to pay the VAT. HMRC will normally let you file a VAT return monthly if you are always due a repayment return which will help your cash flow. To zero rate any goods for export, they would need to be invoiced to a company outside the UK and make sure you keep the waybill/BOL in case you are VAT inspected.

Posted:
Report inappropriate content

andrew brookes, on behalf of GinBrookes in SS2.

Thanks for responses there is definitely confusion here. A friend of mine is registered with the
HMRC as a sole trader i was with her when she purchased saucepans from the showroom of a saucepan wholesaler ,that would be picked up by a shipper. The supplier did not charge VAT; this was only about 3 weeks ago!

I put this to the supplier I want to buy from and she quoted me this link
http://www.allstores-clothing.com/vat-tax but seemed to indicate that even if my shipper picked up she said we will charge you VAT

Posted:
Report inappropriate content

Fiona Johnson, on behalf of Vellag Ltd in SP3.

The supplier that did not charge VAT may not have been VAT registered of course. The rules are clear that UK to UK invoicing incurs VAT.

Posted:
Report inappropriate content

Hello Andrew,
It is quite correct that a UK to UK sale (never mind where the goods are going) should incur VAT. An export sale does not incur VAT.

With the proper proof of export it is possible for a supplier to you to avoid charging VAT but you cannot force the supplier to do this as they are doing it as a convenience to you and it makes their life more complicated.

If you are a tax registered company your accountant should be able to help you offset or reclaim the VAT you have to pay your suppliers.

Regards,
Susan

Posted:
Report inappropriate content

andrew brookes, on behalf of GinBrookes in SS2.

Thanks Susan,

I might have to make a trip to my local HMRC office to see if they are prepared to answer my questions ( I am registered with the HMRC as me t/a GinBrookes but not VAT registered)

From my perspective its not true that the Government support small business, since I don't want extra red tape or to add more complications like being VAT registered.

Has it always been this way or is it the EU having a hand in it?

Posted:
Report inappropriate content

Hello Andrew,
The only other thing I can think of at the moment is if you are buying goods that are being stored in a UK based customs warehouse (bonded warehouse). In this case you should be able to purchase VAT free and then export the goods.

By all means have a chat with HMRC. Do let us know what happens and good luck.

If I can help with anything else just let me know.

Regards,
Susan

Posted:
Report inappropriate content

To respond to this question, please Login or Register