Exporting from France to the Caribbean

Question

We are a UK VAT registered company.Our client is based in the Virgin Islands and therefore outside the EC.

They order from us boat equipment. We source this equipment in the UK. The source ships the equipment to France where we receive it and put it on a boat (a private yacht) and transport the goods to the Caribbean.

VAT helpline advises that as we receive the goods outside the UK and then transport them outside the EC, transaction is outside the scope of the UK VAT and we should not invoice and collect VAT from our Caribbean client.

Is this a valid view to take?

Notice 703 refers to the New Computerised Transit System and providing commercial and official evidence of export. I want to make sure we do everything correctly.

Answer

Dear Nick

Apologies for the slow response. For VAT purposes goods are supplied where they are located when the supply is made. The rules are explained in paragraph 4.8 of VAT Notice 700 – The VAT Guide.

You say that the equipment is sourced in the UK and on the basis that the goods are in the UK when they are supplied to your customer they will be within the scope of UK VAT.

You should read VAT Notice 703 – Exports to determine whether your supply can be VAT zero-rated as an export.

Our VAT Notices can be accessed online via the following;

https://www.gov.uk/business-tax/vat

HM Revenue & Customs
Customs International Trade & Excise
www.hmrc.gov.uk/contactus

Answer

Thank you for your reply. However you are incorrect in saying that the goods are in the UK when they are supplied to our customer.

We order the goods from a UK supplier but we take receipt of goods in France and our customer takes receipt of them in the British Virgin Islands. The UK supplier ships the items to France from their warehouse in the UK or direct from the manufacturer which could be another country in the EU.

We have read the documentation and spoken to the VAT and Customs helpline, but our scenario does not exactly fit their criteria and we get conflicting and contradictory advise every time we speak to them.

Thanks again

Answer

Dear Nick

Apologies for the slow response. For VAT purposes goods are supplied where they are located when the supply is made. The rules are explained in paragraph 4.8 of VAT Notice 700 – The VAT Guide.

You say that the equipment is sourced in the UK and on the basis that the goods are in the UK when they are supplied to your customer they will be within the scope of UK VAT.

You should read VAT Notice 703 – Exports to determine whether your supply can be VAT zero-rated as an export.

Our VAT Notices can be accessed online via the following;

https://www.gov.uk/business-tax/vat

HM Revenue & Customs
Customs International Trade & Excise
www.hmrc.gov.uk/contactus

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