Conditions for zero rating: time limits for removing goods and obtaining evidence
Goods can be zero rated provided that:
- they are exported within 3 months of the time of supply; and
- valid evidence of export is obtained within 3 months of the time of supply.
The zero-rated supply is declared on the VAT return covering the time of supply (even though, at this point, the goods may not actually have been exported, or evidence of export is still to be obtained). If conditions are not met within the time limits, the trader is required to account for output tax in the period in which the appropriate time limit expires.
The time limits for removing goods to another EU Member state and obtaining valid evidence are as follows:
- 3 months from the time of supply (including supplies of goods involved in groupage or consolidation prior to removal); or
- 6 months for supplies of goods involved in processing or incorporation prior to removal.
If the trader fails to account for VAT when conditions for zero rating are not met, follow the assessment procedures described in VEXP90300.
If the supplier later removes the goods and/or obtains valid evidence that the goods were removed he may zero rate the supply and adjust his VAT account for the period in which he obtains the evidence. This is provided that the goods have not been used in the UK before removal unless specifically authorised by HMRC.
For certain types of export, the 3-month time limit can be extended. Notice 703 “Export of goods from the United Kingdom” provides further details.