Check all items and exports with HMRC as there are some special cases in which different rules apply.
Exporting to an EU country to someone who is VAT-registered
- HMRC refers to exports to the EU as dispatches or removals.
- You zero-rate VAT on goods exported to VAT-registered people within the EU. (If any VAT is due in the destination country, the recipient pays it there.)
- You have to get the paperwork proving the goods have left the UK, known as 'evidence of removal', within three months of the sale (usually).
- You need to keep customer orders, sales invoices, invoices from the companies who actually did the removal (shipping, couriers, etc), lists of what was packed, all correspondence with the customer, relevant bank statements, paperwork proving the document arrived in the destination country. Also keep paperwork if goods are sent by post (form C&E 132) or by courier.
- You have to keep all paperwork for six years.
- You report your exports to HMRC on your VAT return and using an EC Sales List (sent automatically after your VAT is returned).
- If you sell more than £260,000 of goods to EU countries in a year, you must also fill out the Intrastat Supplementary Declaration.
Exporting to an EU country to someone who is not VAT-registered
- This is called distance selling.
- You need to charge VAT at the same rates as you would if you were selling in the UK.
- You follow the same process as if you were selling to someone in the UK, including the VAT on the invoice.
- Put prices on the invoice in sterling and the foreign currency. (You can use the exchange rates in newspapers or on HMRC's site.)
You only need to register for VAT in that country if:
- You exceed a certain threshold of sales in one country (different for each EU country). Find out the threshold from HMRC.
- You are distance selling goods on which excise duty is due (such as alcohol or tobacco) if you are delivering the goods. (If the customer is collecting goods on which excise duty is due, you don't need to register and you just zero rate them as normal.)
- If goods on which excise duty is due are for personal use.
- If you have charged VAT on a sale, you need to report it to HMRC just on your VAT return.
- If you have sold more than £260,000 of goods to EU countries in a year, you must fill out the Intrastat Supplementary Declaration (find out more in Resources, below)
Exporting to countries outside the EU
- HMRC uses the term 'exports' to mean exporting goods to countries outside the EU.
- As VAT is only a Europe-wide thing, you zero-rate goods going outside the EU.
- But you have to make sure you have documentation to prove the sale happened, the shipment happened - and make sure the goods leave the EU within three months.
- Record these exports on your VAT return.
- Keep copies of invoices and the documentation listed above proving export.