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Charging VAT on exports, despatches and movements of goods abroad

If you sell, supply or transfer goods out of the UK to someone in another country you may need to charge VAT on them. Generally speaking, you can zero-rate supplies exported outside the European Union (EU), or sent to someone who's registered for VAT in another EU country, provided you follow strict rules, obtain and keep the necessary evidence, and obey all laws. This guide will tell you when you can zero-rate your goods and what evidence you need to keep.

If you send goods out of the UK there are also a number of official forms you'll need to complete. This guide will also help you find out what forms you need and how to fill them in.

On this page:

VAT on sales to someone who is VAT registered in another EU country

If you supply goods to another EU country these sales are now technically known as despatches or removals rather than exports. The term 'exports' is reserved to describe sales to a country outside the EU.

When you despatch goods to someone in another EU country, and they're not registered for VAT in that country, you should normally charge VAT. This applies even if you're sending them to another part of your own organisation.

See the section in this guide on VAT on sales to someone who isn't VAT registered in another EU country.

Zero-rating goods sold within the EU

If you're sending goods to someone who is genuinely registered for VAT in the destination EU country, you can zero-rate the supply for VAT purposes, provided you meet all the conditions below.

To account for the VAT on zero-rated sales to another EU country, include the value of the goods and services in your VAT return in boxes 6 and 8 in the usual way. If any VAT is due in the destination country, then your customer pays it to the tax office in their country.

You can only zero-rate these supplies when all these conditions are met:

  • the goods are sent out of the UK to somewhere in another EU country
  • whoever you're sending them to is genuinely registered for VAT in another EU country
  • you get their VAT registration number - including the two letter country code - and show it on your sales invoice
  • you've got paperwork showing that the goods have gone out of the UK - 'evidence of removal'
  • you despatch the goods and get evidence of removal within a set time - which is normally three months

Evidence of removal will include a number of things like:

  • customer orders
  • correspondence with customers
  • sales invoices
  • packing lists
  • invoices from hauliers
  • bank statements
  • consignment notes showing the goods have been received in another EU country

These documents must show details of:

  • your business
  • your customer
  • the goods and their value
  • the method of transport and route
  • where the goods are going to

The description of the goods mustn't be vague.

If the evidence is unsatisfactory, then you may have to pay all the VAT. You must keep all the evidence for six years and show it to us if we ask to see it.

If you can't get this evidence in time you must account for VAT on your return when the time limit has passed.

More about time limits and accounting for VAT in section 4 of VAT Notice 725

You can use an online interactive tool to check whether a VAT number for any EU country is valid. However, this doesn't tell you whether the details given by someone match with that VAT number, so it is only useful as a preliminary check. To confirm the details you've been given by a new customer, you should contact us on Tel 0845 010 9000.

Check EU VAT registration numbers on the Europa web site

Despatch by post

You can zero-rate goods that you send by post to a customer who is VAT registered in another EU country. You'll need to use our form C&E 132, or ask at the Post Office for a certificate of posting when you post the goods. If you use Royal Mail Parcel Force, they'll give you a Despatch Pack with accounting documents, a customs export declaration and a receipt copy. When you take the parcel to your Post Office, the clerk signs and stamps your receipt copy. The Despatch Pack goes with the goods. For EU sales you don't need to fill in a customs export declaration form.

Obtain form C&E 132 Certificate of Posting

Despatch by courier

If you use courier or fast parcel services, you'll normally be given an airways bill number for each shipment. This is acceptable evidence that the goods have gone abroad. Otherwise, they'll give you a Customs Despatch Pack receipt copy.

Collection by customer

If your customer arranges to collect the goods from you, you'll need to be sure how and when the items are leaving the UK, and what evidence of removal they will give you, before you agree not to charge VAT. If you have any doubts at all, it’s advisable to take a deposit that's the same as the VAT that would be charged. If they give you the evidence that the goods have left the country within the time limit, you can refund the deposit.

More about the evidence you need when a customer collects in section 5.5 of VAT Notice 725

Call-off stocks

Call-off stocks are goods that you despatch from the UK to another EU country, and keep in storage ready for a particular customer in that country. The customer only calls for them ('call-off') when the goods are needed, and until this happens, you are still considered the owner of the goods. However, 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 as having been already supplied and, assuming that all the usual conditions have been met, zero-rate the supply.

If you are holding call-off stocks for a customer but can't meet the above conditions, you have to treat them as consignment stocks.

Consignment stocks

Consignment stocks are goods you despatch to another EU country where they’re held somewhere before you finally supply them to a customer in that country.

That means you have to account for VAT in that country, and may have to be registered there. See the section below on whether you need to register for VAT in other EU countries

Reporting requirements for zero-rated EU sales

All UK registered traders have to send us lists of their EU sales. This helps us to make sure that the right VAT is charged.

You have to tell us about zero-rated EU sales on three different forms:

  • your normal VAT return in boxes 6 and 8
  • the EC Sales List (ESL)
  • the Intrastat Supplementary Declaration, if you sell over £260,000 of goods to other EU customers in a year

We'll send you the ESL automatically if you've completed box 8 on your VAT return.

Completing your EC Sales List

You'll need to fill in the ESL each quarter unless we agree a different period. Normally, the ESL is for the same quarter as your VAT return. You may be liable to a penalty if you fail to return your ESL or if it contains a material inaccuracy. You can send your ESL in three ways:

  • on paper
  • by typing the details in online
  • by uploading a Comma Separated Variable (CSV) or Extensible Markup Language (XML) file

The upload options are particularly attractive if you regularly submit more than 20 lines.

You must put on the ESL details of your customers':

  • VAT numbers
  • countries
  • value of sales

You must also include details of sales where you acted as intermediary but didn't physically acquire and despatch the goods - that is, you bought and sold them on paper, but they were physically shipped direct from your supplier to your customer.

To either complete your ESL online or use the upload facility, you'll need to set up an online VAT account, if you don't already have one, and enrol for and activate the EC Sales List Service (ECSL Service).

Simplified ESL

You can apply to us for permission not to fill in a full ESL if:

  • your total taxable sales in a year aren't over £72,500
  • your EU sales in a year aren't over £11,000
  • your sales don't include new boats, aircraft or motorised land vehicles

You'll still have to fill in a simplified ESL once a year.

Get more information about the EC Sales List including making corrections and filing it online

Obtain form VAT 101 EC Sales List

How to set up an online VAT account

Access HM Revenue & Customs online services

More about completing Intrastat Supplementary Declarations in Customs Notice 60

Find out which countries and territories are part of the UK in VAT Notice 703

Find out which countries and territories are included in the EU VAT area in VAT Notice 703

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VAT on sales to someone who isn't VAT registered in another EU country

What counts as a sale to another EU country?

If you supply goods to a customer in another EU country who isn't registered for VAT in that country, and you are responsible for delivery - that is, they don't collect them - then this is called a 'distance sale'. The most common examples are mail order or Internet sales to private individuals in another EU country.

However, if you transfer your own goods to another EU country - whether to another part of your organisation, or simply to put in storage - this is treated as if you had made an acquisition in the destination country. You therefore have to account for VAT in that country, and if you're not registered for VAT there, that means paying VAT.

Do you need to register for VAT in other EU countries?

For these supplies, you must charge VAT at UK rates in the normal way. However, each country has a 'distance selling threshold'. If the value of your sales to that country exceeds this threshold, you must register for VAT in that country, and charge their rate of VAT on sales to that country.

How do you charge VAT to someone in another EU country?

If you sell goods or services to someone who isn't VAT registered in another EU country, you must charge VAT in the normal way - just as you would for a UK customer.

Find out how to account for VAT when you invoice in another currency

You include the sale in your VAT return for the period when the tax point takes place. This is usually the date you invoice your customer - just the same as for sales to UK customers. If your customer collects the goods - or you send them before you invoice them - then the tax point is the 15th day of the month after they're collected or despatched. You may need to know the tax point for your EU Sales List and Intrastat Supplementary Declarations.

It's a bit more complicated if your customer pays you all or part of the price before you send an invoice. You must send your customer an invoice for the full amount, and the date of that invoice is the tax point.

Excise goods

Supplies of excise goods to persons not registered for VAT in another member state can be zero-rated, as long as the following conditions are met:

  • The goods must not be for private use.
  • The goods must be removed or despatched from the UK to another member state by or on behalf of the customer.
  • You must obtain a receipted copy of an Administrative Accompanying Document (AAD) within 15 days of the end of the month when the goods are moved. This has to be certified by the recipient of the goods, or the VAT authority in the member state where the goods are being sent. You must complete the movement of goods as soon as possible, and the certificate of receipt for the goods must be issued within four months of the time of supply.

If these conditions are not met, then the customer is liable for excise duty and VAT.

Reporting requirements for EU sales where VAT is charged

If you've made EU sales where you've charged VAT, include the value of the sales in boxes 1 and 6 on your VAT return, and pay us any VAT you've charged in the usual way.You will not have to report these sales on an ESL.

However, you'll have to complete an Intrastat Supplementary Declaration if your sales to other EU customers exceed £260,000 of goods in a year.

More about distance selling thresholds in VAT Notice 725

Find out when transactions take place for VAT purposes

Find out which countries and territories are part of the UK in VAT Notice 703

Find out which countries and territories are included in the EU VAT area in VAT Notice 703

Find out more about completing Intrastat Supplementary Declarations in Customs Notice 60

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Temporary movements of goods to another EU country

You may have to send goods to another EU country so you can do a job there. These are called 'temporary exports'. You won't have to account for VAT on these goods if:

  • you don't have a place of business in the EU country where you've taken the goods
  • you've got a contract to carry out there and need the goods for that contract
  • you intend returning the goods to the UK when the contract is finished
  • the goods aren't abroad for more than two years
  • the goods would get temporary import relief if they'd come from outside the EU
  • you keep evidence that the goods have left the UK and returned
  • you keep a register of temporary exports to other EU countries

More about goods eligible for temporary import relief in VAT Notice 200

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Despatching and installing or assembling goods in another EU country

You might have a contract to supply goods that you've got to install or assemble on site. When this happens, your supply takes place in the country where you install or assemble the items. You might have to register for VAT in that country.

Some EU countries have a simplified system for this but you'll need to contact the VAT office in that country for details.

Find a list of EU VAT contacts in VAT Notice 725

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Sending goods to another EU country for repair or other processing

If you send goods to another EU country for repair or processing, you don't make a sale - so you don't need to charge VAT. The EU repairer or processor won't charge you VAT for their work if you're registered for VAT in the UK. But you have to operate something known as the 'reverse charge procedure' when the goods come back - in other words you charge yourself VAT, and then reclaim it in the normal way. There's no net effect as far as you're concerned.

You'll also have to:

  • keep a record of the temporary movement of goods
  • fill in the Intrastat Supplementary Declaration for the despatch and return of the goods

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VAT on exports of goods to non-EU countries

VAT is a tax charged on goods used in the EU, so if goods are exported outside the EU, VAT isn't charged.You can zero-rate the sale provided you get and keep evidence of the export, and comply with all other laws. You must also make sure the goods are exported, and you must get the evidence, within three months from the time of sale. This can be longer for goods that need processing before export and for thoroughbred racehorses.

The time of sale is the earlier of:

  • the day you send the goods to your customer
  • the day you receive full payment for them

You mustn't zero-rate sales if your customer asks for them to be delivered to a UK address. If the customer arranges to collect them from you - an indirect export - you may be able to zero-rate the sale as long as certain conditions are met.

More about the conditions for zero-rating indirect exports in VAT Notice 703

Goods exported temporarily or sent on sale or return

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 don't have to pay VAT in the UK when the goods are returned.

Goods processed in the EU before they are exported

You might sell goods to a non-EU customer, but first send them to another EU business for processing. You can still zero-rate the sale if:

  • the goods are delivered to the EU business, not sold to them
  • the EU business doesn't use the goods - it only processes them for export

In addition, your records must show the following:

  • the name and address of the customer
  • invoice date and number
  • description, quantity and value of goods
  • name and address of EU processor
  • date by which goods must be exported
  • proof of export and date of actual export

If goods have to be processed in the EU after leaving you but before they're finally exported, the time limit becomes six months.

Many businesses get their freight forwarder, shipping company, airline or other agent to handle the paperwork.

More about appointing an export agent in VAT Notice 703

Speeding up and simplifying the export process

The New Export System (NES) is an electronic based system that allows you to send export documentation to us electronically. This makes exporting your goods quicker and easier.

You'll need to contact us directly if you want to use NES.

Find out how to apply for and use the NES in VAT Notice 276

Proof of export

You need documentary evidence of goods leaving the EU to zero-rate your exports. This can be commercial or official evidence. If you don’t get this evidence in time, you’ll have to account for the VAT on your return.

If you use NES, you'll automatically get an electronic Goods Departed Message when the goods leave the UK, and this is acceptable official evidence.

In addition to evidence that the goods have physically left the EU, you’ll need to hold supplementary evidence - eg, within your accounting system - to show that a transaction has taken place.

If the evidence is unsatisfactory, then you may have to account for VAT on the sale.

You must keep all the evidence for six years and show it to us if we ask to see it.

More about what proof of export you need in VAT Notice 703

Exports to the Channel Islands

Excise goods or goods subject to customs control exported to the Channel Islands need a Single Administrative Document (SAD) declaration on form C88. You can do this through the NES.

Other goods need either:

  • a bulk NES declaration by the shipping line - supported by individual Consignment Notes and Customs Declarations (CNCD)
  • individual NES declarations that you make

Exports via EU member states

If you send goods by road across the EU before they're finally exported, you'll need either:

  • official proof of export for VAT - either form C88 (SAD) or the NES form endorsed at the customs office of exit from the EU
  • commercial transport evidence that the goods left the EU

If you don't have one of these, you can't zero-rate the sale.

Exports by retailers

You can zero-rate sales of goods for export to private customers if you meet the conditions for commercial exports, or the conditions of a retail export scheme.

More about the Retail Export Scheme in VAT Notice 704/1

More about zero-rating sailaway boats for personal export in VAT Notice 703/2

More about zero-rating motor vehicles for personal export in VAT Notice 705A

VAT accounting and reporting for exports

You'll need to keep several records for VAT on exports:

  • on your VAT return put your sales into box 6
  • copies of invoices and other sale documents
  • your register of temporary movements
  • evidence of export

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More useful links

If you are an overseas trader find out if you are entitled to a refund on VAT paid during a visit to the UK in our guide to getting VAT refunds

More about selling to customers in the EU in VAT Notice 725

More about exporting to customers outside the EU in VAT Notice 703

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