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HMRC internal manual

VAT Transport

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HM Revenue & Customs
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Transport and related services connected with imports and exports: Zero-rating of services connected with exports

When goods are consigned for export to a place outside the EC, transport to the place of exportation is zero-rated under item 11(a) of Group 8. This applies even when exportation is to be from another Member State. If goods are manufactured specifically to fill an export order they are regarded as being consigned for export as soon as manufacture is completed; otherwise they are regarded as consigned for export at the time they are allocated to an export order. Goods which are specifically imported for re-export are regarded as consigned for export when they reach their “first destination” as imported goods.

The handling or storage of goods, when directly connected with a specific movement of those goods from the UK or another EC State to a place outside the EC, is also zero-rated under this item.

The supplier of such services must hold satisfactory evidence that he is providing a service connected with a specific export of goods in the form of commercial documentation (see Notice 703 VAT: Exports and removals of goods from the United Kingdom).

Examples of services which are zero-rated under item 11(a)

  • Goods situated in a warehouse in Liverpool are consigned for export to Brazil. The transport of the goods from Liverpool to Brazil, is zero-rated to the extent the place of supply is the UK.
  • Goods in the UK are consigned for export to Russia. If a UK supplier transports them as far as Dover and places them in storage while awaiting a ferry, his supply of transport and storage is zero-rated to the extent that the place of supply is in the UK.

Examples of services which are not zero-rated under item 11(a)

Item 11(a) does not zero-rate:

  • Services which are unconnected with an export of goods to a place outside the EC.
  • Services connected with goods which have not specifically been consigned for export at the time of supply.