Standard VAT rate is 15%. Therefore, HMRC recommends that you get someone to deal with customs declarations for you, such as a freight forwarder, custom agent or broker or fast parcel operator. What are … This guide and the links we’ve included will help you do that, ensuring you stay on the good side of the tax collector and reclaim the correct amount of money you’re owed. Make sure you keep a record of customer VAT numbers. If you send goods outside the EU temporarily for exhibition, or sell goods on sale or return and they’re returned, then no sale has taken place and you do not have to pay VAT in the UK when the goods are returned. Export VAT is a tax on goods and services provided to customers outside of the UK. So instead of actually doing this, they need to declare both the output tax they would have charged you and the input tax you would have paid them in their VAT return under the same transaction, essentially cancelling each other out. There are two sides of international trade: importing and exporting. While each country has specific documents they’ll ask you to supply, in general, to register for VAT you’ll be asked for: 1. August 31, 2018. If you have any doubts, you should take a deposit that’s the same as the VAT that would be charged. Tide is here to help small business owners and sole traders save time and money. This makes exporting your goods quicker and easier. N.B. Excise goods or goods subject to customs control exported to the Channel Islands need a Single Administrative Document (SAD) declaration on form C88. Check that you’re applying the correct rate of VAT. If the evidence is unsatisfactory, then you may have to account for VAT on the sale. However, if your business sells services to consumers outside of the UK, you do need to charge VAT, depending on the type of service. For distance sales, you must charge VAT at UK rates in the normal way. CPCs can be found on the, Proof of VAT or tax registration in your country of domiciliation, Proof of existence form the national company register, Custom declarations for goods exported to the EU (these currently only apply to exporting goods to the rest of the world). However, to be entitled to this relief, the exporter will need proof of the … Contact the tax authority in that country to check. This card is for payments from Tide accounts. Declare details of your sales on your VAT return. The following is based on an assumption the exporting company is VAT registered and that the annual exports to the EU are under £250,000 in value which is below the current Intrastat threshold. Partnerships Executive and small business accounting advocate. To confirm the details you’ve been given by a new customer, you should contact the VAT Helpline. For EU sales you do not need to fill in a customs export declaration form. Consignment stocks are goods you dispatch to an EU country where they’re held somewhere before you finally supply them to a customer in that country. Ultimately, the reverse charge is a complicated solution to a very simple reality: you do not need to charge VAT on export services and your customer does not need to pay VAT on import services bought from within the UK to EU countries and vice versa. You’ve accepted all cookies. VAT: how to report your EU sales How VAT … PPS holds an amount equivalent to the money in Tide current accounts in a safeguarding account which gives customers protection against PPS’ insolvency. Liability to VAT. 6. We use cookies to collect information about how you use GOV.UK. Let’s break down the B2B and B2C scenarios in more detail. You can zero rate the sale, as long as you get and keep evidence of the export, and comply with all other laws. Don’t worry we won’t send you spam or share your email address with anyone. Input VAT on Exports. You must also make sure the goods are exported, and you must get the evidence within 3 months from the time of sale. The word ‘pay’ is misleading, however, because the way it is set up means they actually do not need to pay any VAT on the purchase (we’ll untangle this in a moment). You may have to send goods to an EU country so you can do a job there. From 1 January 2021, new rules and rates on exports will come into effect to reflect Britain’s post-Brexit relationship with the EU. If the customer collects them you can zero-rate the supply, unless they’re for private consumption, in which case they’re liable to UK VAT in the normal way. You zero-rate VAT on goods exported to VAT-registered people within the EU. If you deliver the goods (or arrange for them to be delivered), they’re treated as distance sales in the country you deliver them to, and you must register for VAT there no matter the value of the sales. We use this information to make the website work as well as possible and improve government services. In addition to evidence that the goods have physically left the UK and EU, you’ll need to hold supplementary evidence, for example, within your accounting system, to show that a transaction has taken place. If you don’t already have an accountant, check out our guide on how to choose an accountant for your small business. To increase the productivity of VAT, the Government enacted the Value Added Tax and Supplementary Duty Act of 2012. So if a customer from Germany uses your services while on holiday in Portugal, the sale would be subject to Portuguese VAT. It also provides guidance on what you should do when you export goods in specific circumstances. A business must ensure that it charges and pays the right amount of VAT and duty. Otherwise, they’ll give you a customs dispatch pack receipt copy. If … The Tide card is also issued by PPS pursuant to license by Mastercard International. The services provided by freight forwarding, shipping and clearing agents and port authorities are liable to VAT and providers of these services will be required to … You’ll need to keep several records for VAT on exports: Put your sales into Box 6 on your VAT Return. The reverse charge was created as a way to simplify processing B2B transactions across borders. Be the first to hear about our webinars, new features and business tips to help you save time and money. You can find out more about removals in Notice 725: the singl… It will take only 2 minutes to fill in. If you don’t have evidence of the export, you need to account for the full rate of VAT. Any goods sent outside of the EU must be declared on an export declaration to get your items through customs. But as long as the customer either operates the storage facility where the goods are held, or is at least aware that the goods have been delivered into storage for them, you can treat the goods in the normal way and, if all the usual conditions have been met, zero rate the supply. If you make sales or purchases from countries who are members of the EC, then certain VAT regulations will apply, in particular you may need to complete a quarterly EC Sales List. From 1 January 2021, rules on exports will change to reflect Britain’s new status as a non-EU member. ‘Exports’ describes sales to a country outside the UK or EU. VAT on exports to non-EU countries. Sections 18 (1) and (2) of the Value-Added Tax (Amendment) Act of 2020 states: “18. services that require your intervention to be delivered), you need to charge customers the standard UK rate of VAT (currently 20%). The VAT rules for export … All UK registered traders have to send lists of their EU sales to HMRC. How much VAT you pay or whether you’re required to pay any at all depends on what you’re exporting and where you’re exporting to. Check that you’re applying the correct rate of VAT. The best way to avoid making any mistakes is to know what the most common ones are so that you can steer clear of them. A supply of services shall be zero-rated if all of the following conditions are met: the services are supplied to a recipient outside GCC State and who is “outside the UAE’’ at the time the services are performed; the services are not supplied directly to; … Exports at 0% VAT: How to get VAT Refunds on Exports in UAE. Monitor sales of goods against distance selling EU VAT thresholds. If you sell services to consumers in the EU, you do need to add VAT to your invoices. Take a look at our Business Current Account and get time back to focus on your business. This can be longer for goods that need processing before export and for thoroughbred racehorses. Certain controlled goods require an export licence or certificate. Excise duty is charged on fuel, alcohol and tobacco products. You’ll need to use form ‘Certificate of posting goods form 132’, or ask the Post Office for a certificate of posting. Such … A guide to VAT rules and rates on exports, Charging export VAT on services sold to EU countries, Charging export VAT on goods sold to EU countries, Essential checklists for exporting goods and services, how to avoid and rectify common VAT mistakes, everything you need to know about VAT partial exemption, New marking, labelling and marketing standards, exporting and declaring excise duty goods, how to choose an accountant for your small business, Amount of output tax in box 1 (VAT due on sales), Amount of input tax in box 4 (VAT reclaimed on purchases), Full value of the supply in box 6 (total value of sales), Full value of the supply in box 7 (total value of purchases), If you’re selling services to businesses, the reverse charge applies, If you’re selling services to consumers, VAT is charged at the UK rate for non-digital services and the local VAT rate for digital services, If you’re selling goods to VAT-registered customers, goods are zero-rated, If you’re selling goods to non-VAT registered customers, UK VAT is charged up to the point that sales exceed the distance selling EU VAT threshold, The commodity code of goods (also known as Tariff code, HS code or classification code). You may also have to account for VAT in that country, and so must register there. As a general rule, if your UK business sells services to other businesses outside of the UK but within the EU, you do not need to charge VAT but your customer (the buyer) does have to pay VAT in their own country using the reverse charge. All content is available under the Open Government Licence v3.0, except where otherwise stated, Import, export and customs for businesses, Sales to someone who is VAT-registered in an EU country, Sales in an EU country to someone who is not VAT-registered, When you must register for VAT in EU countries, How to charge VAT to someone in an EU country, How to report EU sales where you’ve charged VAT, Temporary movements of goods to an EU country, Installing or assembling goods in an EU country, Send goods to an EU country for repair or processing, Goods you export temporarily or send on sale or return, Goods processed in the EU before they’re exported, Speeding up and simplifying the export process, VAT accounting and record keeping for exports, evidence that the goods have left the country, appointing an export agent in VAT Notice 703, Economic Operator Registration and Identification number (, Place of supply of services (VAT Notice 741A), Work out your place of supply of services for VAT rules, VAT rules for supplies of digital services to consumers in the EU, EU country codes, VAT numbers and enquiry letters for EC Sales Lists, Coronavirus (COVID-19): guidance and support, Transparency and freedom of information releases, the goods are sent out of the UK to an EU country, whoever you’re sending them to is VAT-registered in an EU country, you get their VAT registration number, including the 2 letter country code, and show it on your sales invoice, you dispatch the goods and get evidence of removal within 3 months, consignment notes showing the goods have been received in an EU country, a detailed description of the goods and their value, your normal VAT Return in box 6 and box 8, you do not have a place of business in the EU country where you’ve sent the goods, you’ve got a contract to carry out in that country and need the goods for that contract, you intend to return the goods to the UK when the contract is finished, you keep evidence that the goods have left the UK and returned, you keep a register of temporary movements to EU countries, keep a record of the temporary movement of goods, fill in the Intrastat Supplementary Declaration for the dispatch and return of the goods, the goods are delivered to the EU business, not sold to them, the EU business does not use the goods, it only processes them for export, proof of export and date of actual export, a bulk National Export System declaration by the shipping line, supported by individual Consignment Notes and Customs Declarations (, individual National Export System declarations that you make, official proof of export for VAT, either form C88 (, commercial transport evidence that the goods left the EU, copies of invoices and other sale documents. Find out if VAT is due when you sell, supply or transfer goods out of the UK, and about zero-rated goods, proof you must keep and which forms to fill in. This notice explains the conditions for zero rating VAT on an export of goods, that is, when the goods leave the EC. To learn more about these distinctions, read our guides to VAT exemption and who it applies to and everything you need to know about VAT partial exemption ✅. However, you must keep evidence of the export, and it must fall in line with all other export laws. If your services are non-digital (e.g. If you sell goods or services to someone in an EU country, who is not VAT-registered, you charge VAT in the normal way. If you only sell exempt services you are considered a VAT exempt business, but if you sell some exempt and some taxable goods or services you are considered a partially exempt business. Provide the customer with a VAT invoice and keep copies of these invoices. Brexit means... changes to the VAT rules for imports and exports. The rate that you need to charge them depends on what type of service you offer. The dispatch pack goes with the goods. Consignment stocks are treated as supplied in the UK and liable to UK VAT unless you’re also registered for VAT in the EU country that they’re sent to, in which case they can be zero-rated (as long as you meet all the usual conditions). Check that the country you’re dealing with is part of the EU. An Economic Operator Registration and Identification (EORI) number prevents increased costs and delays when exporting goods to the rest of the world. Zero rate means that the goods are still subject to VAT, but the rate you must charge is 0%. If you have customers in several different countries, this would typically mean registering and filing VAT returns in every market you operate. 2. You must also make sure the goods are exported, and you must get … 1. 4. But if you’re providing construction services and supplying materials that you’re charging the customer for, you’ll need to register for Intrastat. Remember: though sales are zero-rated, they still need to be declared on your VAT return. 2.Impact of VAT and VAT … We’ll also look at how export VAT will change after Brexit. This is similar to a sales invoice and should include the following basic information: Keep copies of all commercial invoices for your own records. If your customer isn’t registered for VAT, the transaction is classed as a ‘distance sale’ and you need to charge UK VAT. For example, let’s say Helen has a business selling t-shirts to consumers in Ireland and Germany. You’ll not have to account for VAT on these goods if all of the following apply: You might have a contract to supply goods that you’ve got to install or assemble on site. The total value of sales to EU countries should be recorded on your VAT return under ‘dispatches’ or ‘removals’. Check whether you need to complete an Intrastat return. You should also keep proof of goods leaving the UK. VAT is a tax on goods used in the UK and EU, so if goods are exported outside the UK and EU, you do not charge VAT. In order to treat the sales VAT free, the following … Note that the local rate of VAT is the rate where the digital service is received, not where the customer is based. Export is zero rated. 7. But each country has a ‘distance selling threshold’. In this post, you’ll learn how export VAT is charged on goods and services in the EU and the rest of the world, with checklists to ensure your exports run smoothly. The process of recording the value of exports on your VAT returns will stay the same. 4 Ensure eligible for export VAT exemption. You’ll need it when you supply information to customs authorities, for example when completing customs declarations. Lovewell Blake explain the issues. Sections 35, 36, 37 and 50, and Schedule 2 of the Act, and Regulation 39 and 42 deal with exports. Goods; The goods are zero rated. 1. You must keep all the evidence for 6 years and show it to HMRC if they ask to see it. In fact, they write at the end of section 5.1 in VAT Notice 741A that: “The reverse charge is not a complicated accounting procedure. You (the supplier) must obtain and retain documentary evidence of the export. Export VAT for non-EU countries. This webinar will throw light upon the following areas: 1.What qualifies as export/import of goods & services from the UAE. Goods delivered from the UK to a destination elsewhere in the EC are not exports for VAT purposes. The process can also be complex. How Does the VAT Rebate for Exports out of China work? – VAT (Value Added Tax) is referred to by different names across the world, for example USA = Sales Tax, France = TVA, Australia = GST. You can change your cookie settings at any time. For example, if you’re providing construction services, you won’t have to register for Intrastat. If you use Royal Mail Parcel Force, they’ll give you a dispatch pack with accounting documents, a customs export declaration, and a receipt copy. You have to tell us about zero-rated EU sales on 3 different forms: We’ll send you the ESL automatically if you’ve completed box 8 on your VAT Return. If you exceed £250,000, you will receive a letter from HMRC and once you register, you’ll be responsible for submitting monthly SDs. If you have customers abroad, you may need to charge VAT on the goods and services you … Where it applies to services which you receive, you, the customer, must act as if you are both the supplier and the recipient of the services. The first step for moving goods into, or … The value of sales to each customer, along with their VAT numbers, need to be submitted to HMRC quarterly via an EC Sales List. The most common examples are mail order or internet sales to private individuals in an EU country. You do not have to register for VAT to import goods, but obviously if you do not register you will not be able to claim back any VAT you pay. SARS has, subsequent to the introduction of VAT, issued a Practice Note detailing the documentation requirements and a Government Notice outlining the VAT Export … This means that sales to customers outside of the EU can be zero-rated. The National Export System (NES) allows you to send export documentation to HMRC electronically. Exports are goods or services produced in the UK that are then supplied to customers outside the European Union (EU). Note: ⚠️ The information in this post is correct up to 31 December 2020. This includes: chemicals; good; excise goods; livestock and foodstuffs. If you send goods by road across the EU before they’re finally exported, you’ll need either: If you do not have one of these, you cannot zero rate the sale. Tide also offers bank accounts provided by ClearBank (ClearBank® Ltd. is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 754568). Home › Blog › Small business tips › A guide to VAT rules and rates on exports. Currently, the EU has 27 members: Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Spain and Sweden. a general taxthat applies, in principle, to all commercial activities involving the production and distribution of goods and the provision of services. If you do not get this evidence in time, you’ll have to account for the VAT on your return. So if the roles are reversed and you are importing services from a B2B EU member state supplier to the UK and the reverse charge is applicable, your supplier does not need to charge you VAT and you must both credit the output tax you would have been charged and debit the input tax you would have paid in your VAT account—resulting in net £0. You are able to make supplies to EC customers without VAT so long as your EC customer meets all the necessary criteria. VAT on goods exported is normally charged at a rate of 15% (standard rate), or 0% (zero rated). You can use an online interactive tool to check if a VAT number for an EU country is valid. If your customer is registered for VAT in their local country, you can ‘zero-rate’ sales, providing you keep records of your export goods leaving the UK within three months of the sale and obtain their local VAT number. This can be commercial or official evidence. You can find out what you need to do to get your business export-ready post Brexit by using HMRC’s step-by-step guide. You can zero rate goods you send by post to a customer who is VAT-registered in an EU country. If you’re holding call-off stocks for a customer but cannot meet these conditions, you must treat them as consignment stocks. If you sell goods, check the EU VAT thresholds for each country in case you need to register for VAT and apply the local VAT rate on sales. Where distance sales become more complex is when your sales reach the distance selling EU VAT threshold in a particular country. It applies if your supplier belongs outside the UK even if they have a UK VAT registration number.”. As of 1 January 2021, UK businesses have to consider imports and exports to and from European Union (EU) countries as they do for countries outside the EU. Where the customer is VAT-registered are goods or services purchased from abroad note: ⚠️ the in... 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