Freight containers

By Tolley

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

  • Freight containers
  • What is a container
  • VAT treatment of supplies of containers
  • Sale of containers to EU VAT registered business customers
  • Leasing or hiring containers
  • Temporary movement of containers to other EU member states
  • Container repairs

This guidance note provides an overview of the zero-rating provisions that relate to supplies of freight containers that will be removed from the UK.

What is a container

From a VAT perspective, a container is treated as an article of transport equipment, such as a lift-van, moveable tank or similar that meets the following conditions laid down in HMRC Notice 703/1 :

VATA 1994, s 30(6), (8); SI 1995/2518, regs 117,128,134; De Voil Indirect Tax Service V4.323 (subscription sensitive)
  • fully or partially enclosed to constitute a compartment intended for containing goods
  • of a permanent character and accordingly strong enough to be suitable for repeated use
  • specially designed to facilitate the carriage of goods, by one or more means of transport, without intermediate reloading
  • designed for ready handling, particularly when being transferred from one mode of transport to another
  • designed to be easy to fill and to empty, and
  • having an internal volume of one cubic metre or more

HMRC also goes on to state that the term container includes:

  • the accessories and equipment of the container, appropriate for the type concerned, provided that such accessories and equipment are carried with the container. The term ‘container’ does not include vehicles, accessories or spare parts of vehicles, or packaging, and
  • air transport containers whatever their internal volume, and
  • ‘flats’ or ‘Lancashire flats’ (bases with or without head and tail boards, which are designed to carry goods and have the floor area of a 20ft or 40ft container), although not strictly covered by this definition HMRC treats them in the same way

However the term container does not

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