Supplies of freight transport services

By Tolley
VAT_tax_img5

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Supplies of freight transport services
  • Determining the correct VAT treatment
  • Non-EU freight transport and imports and exports
  • Freight transport supplied within the EU
  • Accounting for VAT
  • Subcontractors
  • Transport related services
  • Freight transport services to / from the Azores and Madeira

This note discusses the VAT treatment of freight transport and related services. If you are dealing with the VAT treatment of passenger transport services, please see the Supplies of passenger transport services guidance note.

VTRANS050000; De Voil V3.189 (subscription sensitive); HMRC Notice 744B ; HMRC Notice 741A 

Freight transportation occurs when a vehicle, ship or aircraft is provided together with a driver / crew for the carriage of goods. If a business hires a ship or aircraft without a driver / crew then a means of transport is being supplied not freight transport services and the VAT treatment could be different, see the Hiring goods, e-services, telecommunication services and radio and broadcasting services guidance note for more information. Also if a business hires a vehicle, ship or aircraft and it is not used to transport goods then freight transportation services are not being provided.

Freight includes the following types of goods:

  • goods and other cargo
  • mail
  • documents
  • unaccompanied vehicles
  • vehicles transported on a ship and the charge levied by the carrier is the 'driver accompanied rate'
Determining the correct VAT treatment

A business needs to know the following in order to determine the correct VAT treatment of freight transport services:

  • is the customer a relevant business customer or private customer?
  • where does the freight transportation service physically take place (ie which countries are involved)?

De Voil V3.183 (subscription sensitive)

Different VAT rules will apply to the freight transport services depending on the answers to the two questions above.

Non-EU freight transport and imports and exports

This section covers freight transport

More on Cross border supplies of services: