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Exporting - Changes to VAT Notice 703

Exporting - Changes to VAT Notice 703

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Today I have read the changes to VAT Notice 703 (s. 2.12) and would be grateful if somebody could clarify that I am understanding correctly as there is some disagreement between my directors. 

My understanding is that if we invoice our customer in the UK, and they arrange for their freight forwarder to collect the goods from our premises and deliver them to, say, the US, that VAT would now be chargeable.  Assuming that our customer is VAT registered they would be able to claim the input VAT.  Am I interpreting this correctly?


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By macarena
03rd Mar 2014 22:23

From the 1st of October 2013, the law changed, so that VAT registered businesses,are no longer precluded form making use of the scope of export relief, providing those businesses are not established in the UK.

If your customer does not have a business establishment in the UK from which it makes taxable supplies, but is VAT registered, you can still zero rate goods that are exported indirectly.

If your customer has a business establishment in the UK, from which taxable supplies are made and the goods are collected from your premises and exported outside the EU, then this is an indirect export and a supply is made to a customer that is established in the UK. VAT is therefore chargeable.

If your customer in the UK exports to another business in the US, then two supplies are being made.


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