V5.154 VAT refunds in respect of new means of transport removed to another EU member state
A person who is not a taxable person1 may make a supply of goods which involves the removal of the goods to another EU member state2. He may claim a refund of the following if the supply consists in a new means of transport3:
• the amount of any tax on the supply of that new means of transport to him
• the amount of any tax paid by him on the acquisition of that new means of transport from another EU member state, or
• the amount of any tax paid by him on the importation of that means of transport from a place outside the EU
For the definition of new means of transport, see V1.294.
HMRC is required to make a refund if a claim is made. However, the amount of tax refunded may not exceed the amount paid when the new means of transport was obtained4.
X buys a new motor car in the UK for £9,000 plus VAT of £1,575. He sells the car, which remains a new means of transport, to Y for £10,105 and ships the car to France. Y is not a taxable person.
Y may claim a refund of the lower of:
|VAT paid on purchase||£1,575|
|Notional VAT on supply made to Y: 7/47 x £10,105 =||£1,505|
Y therefore claims a refund of £1,505.
Claims are made in accordance with regulations5 made
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