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HMRC internal manual

VAT Export and Removal of Goods from the UK

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HM Revenue & Customs
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Examples of various export scenarios and VAT treatments: Examples involving exports to associated companies outside the EC: Shared service centre

In this example

  • a UK supplier sells goods to a non-EC company
  • the invoice is addressed to the non-EC company, but is sent to a shared service centre in the UK
  • the shared service centre acts for the non-EC company and others, but is a separate legal entity
  • the goods are sent out of the EC to the non-EC company (either by the UK supplier, or by a freight forwarder employed by the non-EC customer)

Diagram of sharedservice centre.

If the UK supplier arranges for the physical export of the goods, this is a direct export. The supply may be zero-rated under section 30(6) VAT Act 1994, provided the conditions in Notice 703 are met.

If the non-EC company arranges for the goods to be exported this is an indirect export. The supply may be zero-rated under section 30(8) VAT Act 1994, and regulation 129 of VAT Regulations 1995, provided the conditions in Notice 703 are met because

  • the UK shared service centre is a separate legal entity and therefore the non-EC company is not a taxable person in the UK, nor does it have a business establishment in the UK from which taxable supplies are made, and
  • the goods have been exported
  • the conditions set out in regulation 129 can, therefore, be met.