VAT on export

[MrJuice]

I have a client from Dubai who is buying goods from me. I will export them and get all the necessary customs clearance etc done by a shipping agent. But he wants to pay by bank transfer from a UK bank account.

Is there potential for HMRC to say to me that since the payment came from within the UK, no export took place and the sale is subject to VAT? That would leave me with a big loss

All the necessary paperwork will be completed by the shipping agent. So I'm hoping it'll be okay but definitely can't afford for things to go pear shaped so wanted to get some reassurance from a bunch of motoring enthusiasts I've never met. As one does.

[bnseven]

as long as you hold a copy of the export entry identifying the goods and that they were shipped then you will have adequate proof of export for HMRC. I have come across some companies who invoice with the vat and then put a credit note for the VAT through when the proof of export appears but we have always zero rated on the invoice as unless they are shipped the invoice will be cancelled anyway....

Hope that helps

[sgrimshaw]

MrJuice said:

Is there potential for HMRC to say to me that since the payment came from within the UK, no export took place and the sale is subject to VAT? That would leave me with a big loss

No, none. You only need to have evidence of export from the UK. It's all about the status of the goods .. not the payment.

[Thats What She Said]

Just keep a copy of the air waybill or bill of lading with the customers order. Next time the VAT man does an audit he will see the export documentation, and all will be good. He wont care where the payment came from, just that the goods left the EU.

[Digga]

Overseas clients can pay from pretty much wherever they like. In fact, for a lot of nations - Russia for example - it is not at all uncommon for businesses to hold a lot of their cash offshore and in various locations. There are, of course, a number of reasons for this.

[j4ckos mate]

yep eveidence of export and your done
no problem

[MrJuice]

Cool, the consensus is reassuring

Thanks everyone

[russy01]

Another one for more assurance 😜

Just make sure you keep very detailed records of shipping. We were investigated last year and they picked holes in some of our docs although all legit. Some of our docs weren’t good enough so we had to pay - so get in the habit of filing it all correctly.

[MrJuice]

russy01 said:

Another one for more assurance ??

Just make sure you keep very detailed records of shipping. We were investigated last year and they picked holes in some of our docs although all legit. Some of our docs weren’t good enough so we had to pay - so get in the habit of filing it all correctly.

Any more detail?

[j4ckos mate]

russy01 said:

Another one for more assurance ??

Just make sure you keep very detailed records of shipping. We were investigated last year and they picked holes in some of our docs although all legit. Some of our docs weren’t good enough so we had to pay - so get in the habit of filing it all correctly.

Really? thats mental,
we email a copy of the awb, invoice and the c88 out when its gone,