Cross Border VAT- Goods Leaving the UK

International goods

• From 1st January 2021 all goods leaving the UK will be a zero-rated export.

• If you use QuickBooks to keep your records, the VAT code to use is 0.00% Z – Zero rate VAT.

• It is expected that the customer will be the importer of record in the destination country and therefore the customer must deal with the import formalities in their own country (VAT/duty/entry declarations). This is the best route for UK clients.

• Some EU customers are insisting that the goods are delivered duty paid (DDP) – this will mean that the UK supplier becomes the importer of record.

What does it mean if the UK supplier becomes the importer of record?

• The UK supplier will need to be VAT registered in the destination country so that they can deal with the import formalities.

• The UK supplier will need to submit a VAT registration request in the destination state and prepare VAT returns in that member state going forward.

• The UK supplier will only have the destination output VAT they are charging to their customer and input tax recovery in respect of the importation meaning the VAT returns should be relatively simple.

• If the UK supplier has no choice but to accept the DDP terms of the customer they should consider appointing a freight agent to deal with the import formalities on their behalf.

If you need more advice on how your business needs to trade with the EU, please get in contact with us.

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Check out our related blog: Cross border VAT- Goods arriving in the UK

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