VAT on goods bought in the UK and EU for export outside the EU ( 0 rated)

Question

I am buying generator sets from a UK supplier to export the sets outside the EU. My UK supplier is charging me VAT as this is a UK transaction. I know that I am not charging my overseas customer VAT.
I would like to know if I can reclaim VAT I pay my supplier as the generator sets are bought for export outside the EU.

Also if I buy a left hand drive car from The Netherlands and ask the dealer to ship directly overseas on my behalf, will I be liable for VAT charges ?

Answer

Hi there,

I think your answers are yes and no respectively. Take a look at the below links and weigh it up for yourself though. If the car is for personal use the process will be different (if personal, see HMRC VAT Notice 707).

See section 10.2
https://www.gov.uk/government/publications/vat-notice-700-the-vat-guide/vat-notice-700-the-vat-guide#input-tax-introduction-and-general-rules

See section 3
https://www.gov.uk/government/publications/vat-notice-703-export-of-goods-from-the-uk/vat-notice-703-export-of-goods-from-the-uk#conditions-and-time-limits-for-zero-rating

https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad#reporting-requirements-for-zero-rated-eu-sales

Kind regards,

Simon

Answer

Thank you for the response, in case of the car from EU do I invoice the non EU client directly while the supplier in the nl invoices me so that this will be a two invoice transaction ?

Answer

Our Ref: Webinar 11

As a VAT registered person, you can reclaim from HMRC as much of the VAT on your purchases as relates to the standard-rated, reduced-rated and zero-rated supplies you make (Section 4.1 of VAT Notice 700 – The VAT Guide refers). Link provided below;

https://www.gov.uk/government/publications/vat-notice-700-the-vat-guide

If the vehicle never enters the UK, no UK VAT will apply as the transaction will be outside the scope of VAT (Section 4.8.2 of VAT Notice 700 – The VAT Guide refers). You may incur VAT in The Netherlands depending on the circumstances, so I would advise you to consult your supplier.

If the vehicle is delivered to the UK, please refer to VAT Notice 728 – New means of transport, section 2.6. Link provided below;

https://www.gov.uk/government/publications/vat-notice-728-new-means-of-transport

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

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