It is possible to zero rate a supply of goods from the UK to a customer in another EC Member State where:
· you obtain and show on your VAT sales invoice your customer’s EC VAT registration number, including the 2-letter country prefix code, and
· the goods are sent or transported out of the UK to a destination in another EC Member State, and
· you obtain and keep valid commercial evidence that the goods have been removed from the UK within the time limits.
If we consider the requirement to quote the customer's VAT registration number it is obligatory that the correct VAT number is stated, if the VAT registration number is invalid UK VAT should be charged at the prevailing rate. The supplier should monitor the level of sales made to each EC Member State where UK VAT has been charged as when the Distance Selling Threshold for the EC Member State is breached registration may be obligatory in that country.
You should check the validity of the number you have been given by making sure it follows the format at paragraph 16.19 of HMRC Public Notice 725. Further checks on the validity of a customer’s number should be made using the Europa website.
Lindsay Gibbons is a consultant at The VAT People and can be contacted here or by telephone on 0161 477 6600.
David Miller is a director of The VAT People and can be contacted here or by telephone on 0161 477 6600.