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HMRC internal manual

VAT Place of Supply (Transport)

From
HM Revenue & Customs
Updated
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Freight transport: outline

Liability

Once the place of supply has been determined and that place is found to be the UK the liability of the supply will need to be considered. Guidance on liabilities can be found in the Transport Liability Manual VTRANS and VAT Notice 744B. To read more about the place of supply rules you should read VATPOSS.

Place of Supply from 1 January 2010

From 1 January 2010 a new “general Rule” for the place of supply of services came into force throughout the EC. This provided for the place of supply of most services to be the place where a customer who is in-business belonges for the purpose of receiving the supply. The supply of transportation and ancilliary services falls under this “general rule”.

The place of supply of services to a person not in-business follows the pre 2010 rules as they applied to a non-VAT registered person. That is, the freight transport and the making of arrangements for such a supply, are supplied where the transport begins, irrespective of where the supplier and recipient belong. Whereas ancillary services and the making of arrangements for such supplies are supplied where the ancillary service is performed,irrespective of where the supplier and recipient belong.

 

Place of supply Before 1 January 2010

The freight transport is supplied where it takes place and ancillary services are supplied where they are physically performed.

There are separate rules for the services of intermediaries who arrange transport and ancillary services for movements of freight which are not intra-EC - the manual covering place of supply of services (intermediaries).

Freight transport, ancillary services and intermediary services arranging both of these for Intra-EC movements

The treatment depends on the VAT registration status of the recipient.

Recipient not registered for VAT or does not give a valid VAT number The freight transport and the making of arrangements for such a supply, are supplied where the transport begins, irrespective of where the supplier and recipient belong. Whereas ancillary services and the making of arrangements for such supplies are supplied where the ancillary service is performed, irrespective of where the supplier and recipient belong.
   
Recipient is registered for VAT and gives a valid VAT number under which the supply is received. If supplier and recipient are registered in the same Member State, the service is supplied in the supplier’s Member State and the supplier charges VAT. However, if supplier and recipient are registered in different Member States, the service is supplied in the recipient’s Member State, and the recipient accounts for any VAT due using the reverse charge procedure.