Exports in a nutshell
Broadly speaking, the term ‘export’ in a VAT sense refers to goods which are removed from the UK to another country.
Generally, goods removed from the UK to another country in the course or furtherance of a business are zero-rated (subject to certain conditions being met). Relief goods exported by a charity are deemed to be exported in the course or furtherance of a business, and therefore can be zero-rated too.
What conditions must be met for exports to be zero-rated?
Zero-rating is dependent on meeting the following conditions:
- The goods must be exported within certain time limits (generally 3 months after the time of supply)
- Evidence of export must be obtained within certain time limits. Evidence may be official (evidence produced by customs systems), or commercial (eg an authenticated airway or seaway bill, or a certificate of shipment)
What is the significance of direct and indirect exports?
Exports may be direct (ie exported by the seller or their agent) or indirect (exported by the customer or their agent).
In the case of indirect exports, the goods cannot be zero-rated if they are delivered to a business customer who has an establishment in the UK (although the existence of a UK VAT registration does not preclude zero-rating), delivered to a private customer who is resident in the UK, or supplied to a visitor for their personal use.
What about Northern Ireland and exports?
Special rules apply in respect of movements of goods involving Northern Ireland owing to its status under the terms of the Brexit Withdrawal Agreement.