VAT on shipping and handling fees

VAT on shipping and handling fees

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I was currently contracted to provide bookkeeping services for a four months old company that is involved in collecting, boxing and shipping goods for individuals and businesses to non- EU countries. Customer goods are filled in containers and shipped overseas. The client, though below the VAT threshold, has expressed interest to register for VAT for reputational reasons. 

My question is, are the services provided by this company VAT chargeable? I visited HMRC website and discovered so many rules relating to VAT on export. 

Thanks for your contribution.

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chips_at_mattersey
By Les Howard
26th Sep 2012 09:58

Overseas shipping

The guidance is not straightforward, but the key questions to ask, in each situation are:

- is the customer in business? B2B and B2C are accounted for differently.

- where does the transportation begin? This will determine the place of supply.

HMRC Notice 741A, chapter 11 is a good place to start, but may well leave you with more questions!

Once registered, B2B supplies can be accounted for using the basic rule. This means you need the customer's VAT registration number; and you may also need to complete an EC Sales List (HMRC Notice 725, chapter 17).

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