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HMRC internal manual

VAT Supplies in Warehouse and Fiscal Warehousing

Supplies of goods within a warehousing regime: Supplies of goods within a tax warehouse

Within tax warehouses, supplies of dutiable goods, whether home-produced or acquired from other EC member-states, are disregarded for VAT purposes under sections 18(2) and 18(3) of the VAT Act 1994 only if a subsequent supply takes place whilst they are still warehoused. If this condition is not met, any VAT due on the sale is to be accounted for when the goods are removed to home use.

18(2) Subsection (3) below applies where-

(a) any dutiable goods are acquired from another member State; or

(b) any person makes a supply of -

(i) any dutiable goods which were produced or manufactured in the United Kingdom or acquired from another member State; or

(ii) any goods comprising a mixture of goods falling within sub paragraph (i) above and other goods.

18(3) Where this subsection applies and the material time for the acquisition or supply mentioned in subsection (2) above is while the goods in question are subject to a warehousing regime and before the duty point, that acquisition or supply shall be treated for the purposes of this Act as taking place outside the United Kingdom if the material time for any subsequent supply of those goods is also while the goods are subject to the warehousing regime and before the duty point.

Supply VAT will be due on removal of goods supplied within the warehouse. If no supply has occurred no VAT is due, except where the goods entered the warehouse as a result of an intra-Community acquisition. In such cases acquisition VAT must be accounted for.

Where acquired goods are supplied in a tax warehouse, the supply extinguishes the requirement to account for acquisition VAT.

VAT may also be due on certain services associated with goods held in a tax warehouse - see VWRHS3000.

The accounting procedures for removals from tax warehouse are explained at VWRHS2060.