VAT and the Channel Islands

[RicksAlfas]

Can anyone help with this please.

I've been asked to quote on a job for a company based in the Channel Islands.
The product is standard rated in the UK, but an invoice to the Channel Islands would normally be zero rated, and that's fine.

However, the request is to deliver the goods to a UK address, not to the Channel Islands, so I'm not sure I can send them a zero VAT invoice. Whenever I've dealt with a customer in Europe and issued a zero rated invoice, the goods have gone to Europe. I seem to recall that HMRC could ask to see proof that the goods have left the UK, but I wouldn't be able to do that in this instance, hence my doubt.

Anyone any ideas or do I need to set aside an afternoon to ring the HMRC "help" desk?

[Vixpy1]

If the point of delivery is the UK, I think Vat must be applied as you have no proof of export

[RicksAlfas]

That was my thoughts too, and confirmed by the HMRC helpdesk - very helpful chap once I'd got through their voice activated question and answer session!

[HootersGsy]

Just to add a minor point, exports outside the EU (e.g. to the Channel Islands) are exempt from VAT, not zero rated. There is a difference, if you make zero rated sales it restricts your ability to claim the input VAT, exempt sales cause no such restriction.

And yes, living on Guernsey I wouldn't expect a seller to remove VAT from goods if they were to be delivered within the UK as you've already found out.

[namtav]

HootersGsy said:

Just to add a minor point, exports outside the EU (e.g. to the Channel Islands) are exempt from VAT, not zero rated. There is a difference, if you make zero rated sales it restricts your ability to claim the input VAT, exempt sales cause no such restriction.

Sorry, but that is as wrong as it is possible to get.

Exports outside the EU are zero rated if you hold the necessary evidence. If not, then they are whatever rate they would normally be (standard, reduced rate, or zero).

Zero rate supplies allow you to recover input VAT, it is exempt supplies that mean you cannot recover input VAT.

[sgrimshaw]

HootersGsy said:

Just to add a minor point, exports outside the EU (e.g. to the Channel Islands) are exempt from VAT, not zero rated. There is a difference, if you make zero rated sales it restricts your ability to claim the input VAT, exempt sales cause no such restriction.

And yes, living on Guernsey I wouldn't expect a seller to remove VAT from goods if they were to be delivered within the UK as you've already found out.

You need to read VAT Notice 703.

https://www.gov.uk/government/publications/vat-not...