Change in applicability VAT zero rate for export in the UK

Recently the UK VAT law is amended, making the VAT zero rate for export wider applicable in the UK. In this article we describe the situation in which the VAT zero rate now is applicable unlike in the past (according to the UK law).

If a UK supplier supplied goods to a non-EU taxable person, these goods were collected (or arranged to be collected) by the non-EU taxable person and transported to a non-EU country, there were two possibilities in the UK.

The first possibility was that the non-EU taxable person was not registered for VAT purposes in the UK. The UK supplier could issue an invoice with 0% UK VAT.

The second possibility was that the non-EU taxable person was registered for VAT purposes in the UK, despite he was not established in the UK nor had a (VAT) permanent establishment in the UK. In this situation the UK supplier could not apply the VAT zero rate for export and had to supply the goods with UK VAT.

The latter was not in accordance with EU law. Therefore the UK has amended its law to comply with EU law. Consequently in the second situation the UK supplier can apply the VAT zero rate for export. So your business can also apply the zero rate in such situations.

In the past businesses had to comply with the “wrong” UK law for the second situation. Please note that if affected businesses had a VAT disadvantage related to this subject and they choose to correct past transactions, they can make a claim to the UK tax authorities. Of course Pincvision is happy to help your business with such a claim.

Via Change in applicability VAT zero rate for export in the UK | Pincvision.

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