VAT for non-EU Companies

[City_Tiger]

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I have a question about VAT.

I am working on behalf of a non-EU company who are therefore not part of the VAT system.

We are arranging to purchase some stock from a UK VAT registered company. The stock will be invoiced to the non-EU company and paid for in full by them.

However, the stock will be shipped to myself as their UK representative.

Question is, should the company be charging VAT? Obviously the company purchasing the stock is exempt from VAT but the goods are remaining in the UK.

[darrenb]

If I have understood things correctly the following should answer your question:

HM Revenue & Customs

3.4 Conditions for zero-rating indirect exports
The text in this box has the force of law


A supply of goods to an overseas customer (see paragraph 2.4) sent to a destination outside the EC is liable to the zero rate as an indirect export where:


overseas customer:
exports the goods from the EC within the specified time limits (see paragraph 3.5), and
obtains and gives you valid official or commercial evidence of export as appropriate (see paragraphs 6.2 and 6.3) within the specified time limits,
and you:


keep supplementary evidence of export transactions (see paragraph 6.4), and
comply with the law and the conditions of this notice,
and the goods are not used between the time of leaving your premises and export, except where specifically authorised elsewhere in this notice or any other VAT notice.


You must not zero-rate an indirect export where the goods are:

supplied to a private individual who is resident in the UK, or
supplied to a business registered for VAT in the UK (including an overseas business that has a place of business in the UK from which taxable supplies are made), or
delivered to, or collected by, a UK customer at a UK address.
If your export transactions do not fit specifically into any of these categories or those listed in sections 3 and 4 contact our National Advice Service for advice prior to export, obtaining a written decision, if necessary.

[City_Tiger]

Thanks Darren.

So if I understand correctly, VAT should be charged in this case as the goods will remain in the UK.

[darrenb]

Yes that's how I understand it. Proof of export is required to zero rate the supply.