Hi all! We have a UK customer (non- VAT registered) who wants to purchase goods in the UK -GBP (including UK 20% VAT) who then wants us to ship the goods to the US. Will the receiver also have to pay US taxes upon arrival? The goods are zero rated on the tariff but they don't want to pay taxes twice? Any help appreciated!
Only *you* can therefore ship the goods direct to the US at 0% VAT and hence not charge the billing customer VAT to start with (whether they're in the UK, US or where ever). You don't say what the value of the goods are, but the US duty level before anything is due is far higher than UK iirc.
Other options may be available to you, but whether it's worth your/customers while would need to be determined as you need to have evidence of export to 0 rate, see: https://www.gov.uk/guidance/vat-exports-dispatches-and-supplying-goods-abroad
Thanks DefinitelyMaybe UK - So are you saying we could in fact invoice the UK company zero rated as long as we state on the invoice GOODS TO BE EXPORTED and retain evidence such as the commercial invoice produced by the carriers DHL, the shipment waybill and or invoice from the carriers etc all help is very appreciated
In addition we would be sending it on the customers behalf using our carrier account (better rates) . So it would leave us and travel directly to the US. the UK customer wont touch it in the UK I'm just trying to understand it and not let the customer pay taxes here and the us (twice). the goods fall under zero on the trade tariff commodity code.
Yes, that's all correct - we do this regularly. In addition, keep a copy of the "delivery confirmation" of the carrier tracking as further evidence. It's the shipping location that is key, not who pays the bill. Of course, only you can tell whether the bill payer is genuine and not going to claim back once or default once the package has shipped to some far off land And there might be duty and other charges that the recipient needs to pay that are out of your hands under normal duty unpaid DDU shipments, so make sure they're aware. If you need to send duty paid (DDP), then that's likely possible, but best to seek other advice (still struggling with that service as yet!) EDIT- oops just seen " the goods fall under zero on the trade tariff commodity code" well that's good - was that the US tariff portal though and not the UK gov one?
But hold on - that is talking about *charging* VAT on the sale. In this case, the non-VAT registered buyer is UK based, and buying from a UK supplier. They will be charged VAT on the purchase. If they then invoice this to their US recipient at cost, the recipient will need to pay US taxes on the VAT-inclusive prices. The UK buyer would never charge VAT anyway, since they are not VAT registered, although as an export, there would be no VAT on the sale from the UK buyer to the US recipient.
Hi Thanks for chipping in! So can we NOT charge VAT to the UK buyer? Then state EXPORT on the invoice to the UK buyer, your right the UK buyer cant charge the US recipient as their not VAT reg. This is a tricky one alright! Do we charge VAT or can we zero rate it as its going direct to the US (from us) Appreciated everyone's help so far
Thank you so much everyone The tariff is 93 23 001000 . do you have the link to the US tariff portal please?
Yes, that's true *if* the delivery is made to the UK. If the seller can export directly (regardless of who's paying) then VAT is not applicable. See: https://www.gov.uk/hmrc-internal-manuals/vat-exports-of-goods-from-the-uk/vexp80100
Oh, I see, they are buying from you. In that case, I think it's possible according to the link, as it's not being delivered from you to a UK address.
Ive found 9023.00.00 is the closest match any recommendation's if i should simply use 9023.00.00 or use the UK full 9023.001000 Instruments, apparatus and models, designed for demonstrational purposes (for example, in education or exhibitions), unsuitable for other uses - UK Global Online
9023.00.0000 is actually the code from the link I gave - there is no 9023.001000 for US imports. Only the first 6 digits are globally recognised - the final 4 digits are importing country specific. In reality it *may* make little difference to the rate charged, but could cause confusion/delays so best to get it as correct as possible. Glad it wasn't the 93 category (guns and ammunition)
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