Selling to UK customer with Zero rate

Lina

Hi,

My client is registered vat business. They sell products to another UK company ( ABC LTD), who then
export goods to overseas ( Non EU). Till present my client charges vat his customer ABC Ltd.


ABC ltd accountant suggested to my client, that he should not charge VAT on the sale if ABC provided to them with evidence that goods will be leaving UK ( they will provide my client with bill of Lading).

I am not so sure if they can do that ( I mean make a sale to UK Customer with zero rate vat). Any advice will be appreciated.
Thank you

GemmaS

Hi Lina,

We have similar situations at work from time to time. As far as my understanding goes you are correct and you can not Zero Rate a sale to a UK based Company regardless of whether they are exporting out of the country or not.

This is the link HMRC directed me to when I enquired about this recently the relevant part is section 3.4:

http://customs.hmrc.gov.uk/channelsPortalWebApp/channelsPortalWebApp.portal?_nfpb=true&_pageLabel=pageVAT_ShowContent&id=HMCE_CL_000130&propertyType=document#P216_18083



Gemma

Lina

thank you

Thanks Gemma,

that is what I think, but thought I will check with others before I give an answer to my client.
Two weeks ago I was On AAT Vat export course and I have not heard of such a thing there.
Thanks once again:thumbup:

GemmaS

You're welcome