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HMRC internal manual

VAT Supplies in Warehouse and Fiscal Warehousing

HM Revenue & Customs
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Treatment of services associated with goods held within warehouses: How supplies of services may be relieved

Whereas relief from VAT on supplies of goods in warehouses is achieved by deeming the supply to take place outside the UK, relief for qualifying services is achieved through zero-rating. There are a number of conditions that need to be met before the service can be zero-rated. The relevant law is the VAT Act 1994 section 18C.

18C(1) Where-

(a) a taxable person makes a supply of specified services;

(b) those services are wholly performed on or in relation to goods while those goods are subject to a warehousing or fiscal warehousing regime;

(c) (except where the services are the supply by an occupier of a warehouse or a fiscal warehousekeeper of warehousing or fiscally warehousing the goods) the person to whom the supply is made gives the supplier a certificate, in such form as the Commissioners may by regulations specify, that the services are so performed;

(d) the supply of services would (apart from this section) be taxable and not zero-rated; and

(e) the supplier issues to the person to whom the supply is made an invoice of such description as the Commissioners may by regulations prescribe,

his supply shall be zero-rated.

The recipient of a supply must issue and retain a copy of a certificate (see example at VWRHS3070). The trader may create his own certificate but it must contain all the information shown in the example VWRHS3070. In turn, the supplier must retain the certificate and issue a VAT invoice showing zero-rated services and marked:

In accordance with section 18C(1) VAT Act 1994.

Where the recipient of services wishes them to be invoiced to him with VAT at the standard rate, he need not issue a certificate to the supplier. In the absence of such a certificate, the supplier must then charge VAT on his supply.

Warehouse storage charges

The requirement that a certificate must be issued to the supplier of a service does not apply to storage charges made by warehousekeepers. Such services cannot therefore be standard-rated by failure to issue a certificate. Where recipients wish such services to be standard-rated they should instruct the warehousekeeper not to include a declaration on his invoice to the effect that the supply is covered by section 18C(1) of VAT Act 1994.