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HMRC have published information on changes to the rules for zero rating supplies of goods for export outside the EU, which will take effect from 1 October.
Under current legislation,the UK provides for zero rating of goods intended to be exported outside the EU, provided certain conditions are met.
Where goods are sold to a VAT-registered customer outside the UK, the supply is not eligible for zero rating – which contrary to EU VAT law that states zero rating applies regardless of whether or not the customer is VAT-registered in the member state.
HMRC have published information on changes to the rules for zero rating supplies of goods for export outside the EU, which will take effect from 1 October.
Under current legislation,the UK provides for zero rating of goods intended to be exported outside the EU, provided certain conditions are met.
Where goods are sold to a VAT-registered customer outside the UK, the supply is not eligible for zero rating – which contrary to EU VAT law that states zero rating applies regardless of whether or not the customer is VAT-registered in the member state.
UK legislation is to be amended to reflect EU rules, as announced in the Budget earlier this year. There will be no change to the UK provisions for the zero rating of goods exported directly out of the UK by the supplier.
Revenue & Customs Brief 26/13 explains that businesses will be allowed to claim for repayment of VAT incorrectly accounted for, to correct past transactions as a result of the law change.
Zero rating of past supplies in all cases will be appropriate only if the supplier holds valid evidence to show the goods have been exported. For past transactions, the recipients of the supplies in question will need to make corresponding adjustments to the amount of input tax reclaimed.
