VAT on export to Australia for UK customer

[lww]

We have a sale to a customer in Australia - our online system automatically processes prices including VAT (as we say we only support UK orders online), but although the customer has a UK billing address they want shipping to Australia.

Normally I would expect that as it's non-EU the customer would be entitled to a VAT refund upon receipt of goods provided we directly ship it abroad... I assume it doesn't matter that they are using a UK billing address? And is the refund due upon shipping, or upon receipt of goods? I can't find answers to either of these on the VAT site so any pointers gratefully received!

 

[GraemeL]

Morning,

I think the logic is:-

If you are invoicing a UK address, then you are not exporting. So you charge VAT.

Your client has chosen to have the goods shipped to another country. It is your client who is undertaking the international movement, not you, as they already own the goods prior to them leaving the UK. (Though you may be helping them with the physical movement abroad)

Any duties payable in Australia will be your clients responsibility. They will not be able to do anything about the VAT paid in the UK as they have not imported it from you.

For documentation, the invoice/packing list that you supply should have the UK invoice address on it. Your client needs to supply their own export documents.

G

 

[lww]

If you are invoicing a UK address, then you are not exporting. So you charge VAT.

I phoned the VAT helpline to check as your reply had me worried I'd completely misunderstood - they said the UK billing address is not relevant, what matters is that the goods are being sent directly outside the EC and therefore no VAT is due and the goods should have been zero-rated. Therefore the customer is due a refund of the VAT portion as I expected. As for whether to refund upon sending or receipt, it doesn't matter as it is established that the goods should be zero-rated.

So sayeth the VAT man.

 

[lww]

PS. The arbitrary moving of posts to different forums here is not helping... how do you expect people to spend time scanning multiple forums to provide help? Loads of people sell goods abroad, that doesn't mean anyone is going to monitor the "International Business" forum every day...

 

[dagr]

It is very important you keep a written trace of all exports. By that I mean proper transport, delivery & certificate documents (not emails saying "thanks, I received the goods", etc.), specially if billing to a UK address (I admit to still being skeptical about that - I'd get a written reply from the VATman before going too far).

There is a good chance the VAT people will coming looking for proof at a later date.

 

[lww]

Yes I checked as this item is being sent by Royal Mail, and a Post Office proof of postage showing Australia as the destination is sufficient.

 

[GraemeL]

I phoned the VAT helpline to check as your reply had me worried I'd completely misunderstood - they said the UK billing address is not relevant, what matters is that the goods are being sent directly outside the EC and therefore no VAT is due and the goods should have been zero-rated. .

Thanks very much for posting this. As it is the VAT office that have stated this, it must be correct. Logically, I don't get it though!

G