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HMRC internal manual


HM Revenue & Customs
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Import entry procedures: VAT liability of imported fuel and power

Natural gas and electricity are subject to special place of supply rules. For more details see VAT Information Sheet 21/10.

Under these rules gas imported via the UK natural gas system and electricity are relieved from VAT at importation. This includes liquid natural gas imported by tanker and wet gas. The relief from VAT can be claimed against the following Commodity Codes:

  • Natural gas in gaseous state, 2711 21 00 00
  • Liquid natural gas and wet gas, 2711 11 00 00
  • Electricity, 2716 00 00 00.

The reduced rate of VAT (5 per cent) is due on supplies of fuel and power for domestic use or for use by a charity for its non- business activities. Certain small quantities are deemed to qualify as being for domestic use. Generally, all other supplies, acquisitions and importations of fuel and power are liable to Vat at the standard rate. The legal provisions for this reduced rate are in the VAT Act 1994 at s.2; s.29A and schedule 7A, group 1. There is more information about the VAT liability of fuel and power in Fuel and power (VFUP) and in Notice 701/19.

Fuel which remains in the fuel tanks of ships and aircraft arriving from outside the UK (and which is not discharged and landed in the UK) is to be considered as not imported and Import VAT should not be charged. Import VAT is still chargeable in the normal way, however, on fuel which arrives from foreign countries in fuel tanks if that fuel is off-loaded and landed in the UK.

The Position regarding fuel remaining in the fuel tanks of incoming ships and aircraft is likely to be reviewed as part of impending discussions by Member States on proposed changes to the treatment of such fuel.