Help with VAT & Exporting Outside EU

[sosnazzy]

Hello all,

I am stumped. I predominantly sell only to UK customers at the moment. However I have been approached by a customer who wants to buy items for a company based in Uganda.

Now under normal circumstances I would zero-rate the invoice and ship the goods to the destination. However this situation is slightly different.

The buyer is - and I quote him - "personally based in the UK". He wants to purchase my products and have me ship them direct to a UK shipper, who will deliver them to Uganda.

I do genuinely believe that the end-destination of the products will be Uganda, but how do I treat the VAT portion of the invoice? Is it still zero-rated? Or is it 20% because the actual person buying is based in the UK?

I've never come across this situation before so I am both puzzled and very interested by it.

 

[Scalloway]

You need evidence the goods actually left the country to zero rate the sale. Advice from HMRC on VAT and exports here,

https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad

 

[GraemeL]

have me ship them direct to a UK shipper, who will deliver them to Uganda.

If you don't charge VAT and then someones finds that this 3rd party who you have no control over did not actually export them - guess who will have to stump up the VAT?

Has a similarity to an email I had this morning "We need some chairs for a West African country. Do you accept credit cards? Can you ship to West Africa?

This advice applies (Scalloway has given you the link)

you’ll need to be sure how and when the items are leaving the UK, and what evidence of removal they will give you, before you agree not to charge VAT. If you have any doubts, it’s advisable to take a deposit that’s the same as the VAT that would be charged. If they give you theevidence that the goods have left the country within the time limit, you can refund the deposit.

 

[sosnazzy]

Hello Scalloway and Graeme. Thank you for your replies.

If I do decide to proceed with the order I will be taking a deposit equal to the amount of VAT payable, should something go awry.

Can I ask for one more clarification on this? If the customer is based in the UK and pays with a UK bank account, can the invoice still be zero-rated, even if the goods do eventually get exported by himself? I will be having no hand in the actual process of exporting, except delivering the goods to the shipping address (Moro Cargo Ltd).

 

[Scalloway]

The key point is evidence that the goods have left the UK. Graeme L already posted this .

https://www.gov.uk/government/publi...-in-another-member-state--evidence-of-removal