Charging VAT on goods supplied outside EU to UK based customer. - The Book-keepers Forum (UK)

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Charging VAT on goods supplied outside EU to UK based customer.

VATman · Member

It appears that you transfer ownership of these goods while they are in Turkey. That being the case, the supply is outside the scope of UK VAT.

You should not charge VAT on the invoice for these goods.

This sale should not be reflected in your VAT return.

Your customer may have to account for VAT when the goods enter the EU.

Does this help?

fin6y · Veteran Member

I was told by HMRC a few weeks ago that sales even outside the scope of UK VAT should be included in Box 6!

(madness, if you ask me - surely if it isn't within the scope of UK VAT it shouldn't be anywhere near a VAT Return but hey ho...)

Rhianrach · Expert

fin6y wrote:
I was told by HMRC a few weeks ago that sales even outside the scope of UK VAT should be included in Box 6!

(madness, if you ask me - surely if it isn't within the scope of UK VAT it shouldn't be anywhere near a VAT Return but hey ho...)

It does seem silly. We have similar situations and you would think they should be out of scope. We decided they just want to keep an eye on things, we have had a VAT inspection because of figures from outside the EU not tallying with ours.

Wonnov Menny · Veteran Member

Are you a UK VAT registered company trading from a UK address?

If you are, I would have thought it was straightforward transaction between two UK based VAT registered companies, and it was irrelevant where your customer actually collected the goods from. If your customer collects the goods from your supplier in Turkey, they are still buying the goods from you and not your supplier. Your Turkish supplier will bill you accordingly, less the shipping fee because your customer collected.

Of course if you're also based in Turkey and are not a UK VAT registered company, then do as VATman said above..

I'm no expert, I could be wrong, but this just seem logical.

VATman · Member

Whoever said VAT was logical? When you are looking at goods the starting point in deciding whether you charge UK VAT is where the goods are. Take a look at the VAT Guide (Notice 700) published by HMRC. At paragraph 4.8.2 it states:

"If your supply involves goods located in the UK when supplied, Then your supply takes place in the UK. If your supply involves goods located outside the UK when supplied, then your supply takes place outside the UK".

I agree that pragmatically it may make sense to include the transaction on the UK VAT return but would need more facts before agreeing that UK VAT should be charged.