VAT Relief on exports to the EU from the UK?

mcgeezer

mcgeezer

Winger
I have a bit of a post Brexit VAT question here that I'm hoping someone can give me a bit of a steer on?

Let's say I purchase goods from China and I pay import VAT on those goods when they arrive in the UK, I then package the products up and I sell them into both the UK and EU.

As I would be selling goods into the EU the government states that I should zero rate the VAT because the recipient pays the logistics company in their country who then forward the amount to the UK Government, normal sales to the UK are subject to normal VAT of 20%.

My point is that when I do a VAT return to claim relief, could I offset the VAT of the sales I made into Europe at 20 percent against the VAT import charge I paid for goods sent to me from China?

Cheers,
Geezer
 


mcgeezer said:
I have a bit of a post Brexit VAT question here that I'm hoping someone can give me a bit of a steer on?

Let's say I purchase goods from China and I pay import VAT on those goods when they arrive in the UK, I then package the products up and I sell them into both the UK and EU.

As I would be selling goods into the EU the government states that I should zero rate the VAT because the recipient pays the logistics company in their country who then forward the amount to the UK Government, normal sales to the UK are subject to normal VAT of 20%.

My point is that when I do a VAT return to claim relief, could I offset the VAT of the sales I made into Europe at 20 percent against the VAT import charge I paid for goods sent to me from China?

Cheers,
Geezer
Click to expand...
Generally if you are making a mix of standard and zero rated supplies and your costs are all standard rated, you pay the VAT you have collected from your customers and offset the amount of VAT you have paid your suppliers. In quarters where the VAT paid to suppliers is higher than the VAT you have collected from customers, you should get a refund of the excess VAT paid from HMRC. But you wouldn't have collected any VAT from Europe if your supplies to the EU were zero-rated, so there wouldn't be any VAT from your EU sales on your return.

You also need to be clear on exactly what tax you are paying on your Chinese imports - import duty is not the same as VAT and you will probably be paying a mix of the two taxes. You will only be able to offset the VAT portion of your import taxes in your VAT return, not the import duty part.

This is a bit of a steer only. You should get proper advice on your exact circumstances from a tax expert with import/export experience before proceeding.
 

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