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HMRC internal manual

VAT Single Market

From
HM Revenue & Customs
Updated
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Transfers of own goods: goods sent from the UK: supply position

If the owner of the goods is registered for VAT in the Member State to which they are dispatched, the deemed supply in the UK can be zero-rated subject to the normal requirements, such as holding evidence of removal. For more information about this see the manual covering exports and removals of goods from the UK (VEXP).

If the business is not registered for VAT in the Member State to which the goods are transferred, they are deemed to be making a domestic supply and so must account for VAT at the rate applicable in the UK. But this VAT is not recoverable as input tax. However, if the business subsequently registers for VAT in the Member State to which the goods were transferred, and that registration is backdated to include the period when the goods were transferred, the deemed supply may be retrospectively zero-rated. But this is subject to

  • possession of satisfactory documentary evidence that the goods have left the UK
  • inclusion of the value of the deemed supply on a current EC Sales List, and
  • acquisition tax having been accounted for on the goods in the Member State of arrival.

Some Member States will only register businesses from a current date, in which case the business should obtain written confirmation from the tax authorities in the Member State concerned that they will not allow retrospective registration. Subject to this confirmation, and meeting the further conditions set out above, the supply may be zero-rated

Where zero-rating is subsequently allowed under these arrangements any assessments issued in respect of UK VAT on the deemed supplies may be withdrawn.