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HMRC internal manual

VAT Transport

Services supplied to overseas businesses in connection with non-zero-rated ships and aircraft: Services zero-rated under item 11(b)

Supplies before 1 January 2010

Item 11(b) zero-rates the following services in respect of non-qualifying ships or aircraft, when provided to customers belonging outside the UK, who receive the supply for the purpose of a business carried on by them.

  • ship or aircraft handling performed in a port or customs and excise airport under item 6(b) (also see VTRANS140000)
  • air navigation services under item 6A (also see VTRANS150000)
  • ship or aircraft surveys under item 9 (also see VTRANS160000) or
  • the making of arrangements for the supply of any ship or aircraft under item 10(a) (also see VTRANS190000).

By virtue of Group 8, legal Note (7), the zero-rating applies to all ships and aircraft, not just those which are themselves zero-rated under items 1 or 2 of Group 8.

You should determine the place of belonging of customers using the rules given in VATPOSS and in Notice 741.

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Supplies from 1 January 2010

On 1 January 2010 the place of supply of services general rule came into being; this moved the place of supply of the most services to the place where a business customer belongs and outside the scope of VAT. The services coved by this item are general rule services (See VATPOSTR).