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HMRC internal manual

VAT Transport

Transport: Introduction and overview

VAT manuals such as VTRANS are reference material on VAT for people in HM Revenue and Customs (HMRC). These manuals outline VAT formal procedures and work systems and give HMRC managers and staff rules, guidelines and general advice on interpreting them. The guidance is aimed at HMRC staff and should not be relied upon by businesses in calculating their taxes and duties.

Scope of VTRANS

VTRANS deals with the liability of transport services for which the legal provisions are given in the VAT Act 1994, Schedule 8, Group 8. All items of, and legal Notes to, Group 8 are included, except

  • item 3, and Notes 3 and 4, (lifeboats etc supplied to charities) which are dealt with in the VAT Charities manual, VCHAR13000
  • item 12, and Note 8, (designated travel services), which are dealt with in Notice 709/5 Tour operators’ margin scheme, and V1-23 Schemes, Chapter 12
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VTRANS020000 - VTRANS040000 Passenger transport, which includes details of “recreational” passenger transport excluded from zero-rating
VTRANS050000 - VTRANS100000 Freight transport and related services
VTRANS110000 - VTRANS190000 Ships and aircraft, including supply, repair and maintenance of ships and aircraft and ship and aircraft parts


The liability of transport services is also dealt with in the following notices


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The rules set out in this book govern the liability (zero or standard-rating) of transport and related supplies which are made in the UK. Before considering the liability of a supply, you must determine its place of supply, and the place of supply rules are given in VATPOSTR. These relate to all supplies of goods and services, and should always be considered before a decision is taken on a liability matter. In the context of services falling within Group 8, there are particularly detailed place of supply rules relating to freight and passenger transport, and these are of very wide application because so much transport involves movements which cross national boundaries. The place of supply of passenger transport is covered in VATPOSTR2000, and freight transport and related services in VATPOSTR3000. Many supplies of transport services are made outside the UK, and are outside the scope of UK VAT: the liability rules under Group 8 can only apply to a supply which is made in the UK and the extent to which it is made in the UK for cross-border supplies.

Group 8 zero-rates a wide range of supplies (and specifies certain exclusions) which share a general theme of transport, but which often have little else in common. It is not possible to include in guidance every possible type of service which may qualify for zero-rating, but you should be able to come to a decision in most cases by applying the principles described in this book. You will particularly need to use this approach in considering the very extensive range of services relating to the handling and storage of goods under Group 8, items 6 (see VTRANS070000) and item 11 (see VTRANS080000): the examples given are not exhaustive.

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Roles and responsibilities

The Supply Policy Team in the Indirect Tax Directorate at 100 Parliament Street is responsible for VTRANS.

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Freedom of information

No exemptions under the Government’s Code of Practice apply and all information in VTRANS may be released on request.