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HMRC internal manual

VAT Transport

The handling and storage of ship and aircraft cargo: Meaning of "port", "land adjacent to a port", "customs and excise airport" and "transit shed"

Legal Note (6) to Group 8 defines port, customs and excise airport and transit shed for these purposes as having the same meanings as in the Customs and Excise Management Act 1979.

Policy on these definitions lies with Customs and International.

  • Port means any port appointed for customs purposes. Essentially all parts of the UK coastline and tidal waters are within the limits of an appointed port. There are also a number of inland ports (e.g. London and Manchester including the Manchester Ship canal). See C2-1 Section 2 The limits of a port are set out in Statutory Instruments and strictly speaking relate solely to the waterways concerned. If item 6(b) only contained the word “port”, it would limit the relief to services actually supplied on the water.
  • Land adjacent to a port is included so that relief under this item also extends to services supplied on the immediate quaysides and dock areas of ports, and we have accepted that this can extend to an area separated from the main port by the width of a single road. It is not practicable to define strictly the meaning of land adjacent, but as a guide, dock territory entirely separate from the quay area, such as a separate storage compound in the general district of a port but separated from it by an area of industrial or domestic buildings, is not considered to be land adjacent to the port. Services supplied on such land cannot therefore be zero-rated under item 6(b). Officers should use discretion to decide marginal cases.
  • Customs and Excise airport means an airport designated for the landing or departure of aircraft for the purposes of the customs and excise Acts by an Order in Council made in pursuance of section 60 of the Civil Aviation Act 1982. A list of these airports can be found at Chapter 3, Appendix C2 of the Customs Tariff. The limit of a customs and excise airport is normally the boundary of the airport itself.
  • Transit sheds were added to the list in June 2002 to better implement the provisions of the EU Directive as it was clear that the kind of services intended to be zero-rated were occurring outside of the original designated areas in remote transit sheds.

A transit shed is a place which has been approved by the Commissioners of Revenue and Customs for the storage of goods in temporary storage, no matter where that place is located. (“Goods in temporary storage” are goods which have been presented to Customs but have not been assigned a Customs-approved treatment or use). See TSAD.