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HMRC internal manual

VAT Place of Supply (Transport)

From
HM Revenue & Customs
Updated
, see all updates

Freight transport: intra-EC movements before 1 January 2010: VAT registered recipients

UK supplier to UK customer

Where a UK supplier supplies freight transport or related services in respect of an intra-EC movement of goods to a UK VAT registered customer, the service is supplied in the UK and standard-rated, and VAT is accounted for in the normal way. This is because either:

 

  • the UK is the place of departure of the goods, and the place of departure rule applies, or
     
  • if the UK is not the place of departure, the customer is registered in the UK for the purposes of receiving the supply and the place of supply has therefore moved from the place of departure to where the customer is registered.

 

For example a UK supplier transports goods for a UK registered customer from the UK to France, from France to UK, or from France to Belgium. In each case the supply is made in the UK and VAT is charged in the normal way by the supplier.

 

UK supplier to EC customer

Where a UK supplier supplies freight transport or related services to a customer registered for VAT in another Member State who provides their registration number, the supply is made in the customer’s Member State. This is because:

 

  • the customer’s Member State is the place of departure of the goods, and the place of departure rule applies, or
     
  • if the customer’s Member State is not the place of departure, the customer is registered for VAT for the purposes of receiving the supply in a Member State other than the place of departure, and the place of supply has therefore moved to where the customer is registered.

 

The UK supplier does not charge VAT as the supply is outside the scope of UK VAT, and the customer is required to account for any VAT due to the authorities of their own Member State using the reverse charge procedure. The UK supplier is required by law to include the customer’s registration number on the invoice under Regulation 14(2) of the Value Added Tax Regulations 1995.

For example, a UK supplier transports goods for a customer registered for VAT in France: from UK to France, from France to UK, from France to Belgium and from Italy to France. In each case the supply is made in France, the UK supplier does not charge VAT and the customer accounts for French VAT using the reverse charge procedure.

 

Non-UK supplier to UK customer

When a UK VAT registered customer receives supplies of freight transport or related services in respect of an intra-EC movement from a supplier who belongs outside the UK, (elsewhere in the EC or outside the EC), the supply takes place in the UK and the UK recipient of the services must account for VAT using the reverse charge procedure.