Cross Border Goods

by **AvocadoK** on Sat Oct 22, 2011 6:23 pm

Trader X is based in the UK.
X buys used cooking oil from South Africa and sells direct to business customers in the EU (not UK). The oil goes direct from South Africa to EU customer, not via the UK.

Assuming this is the only business activity of X, and turnover exceeds £73k
1. Is the oil zero rated?
2. Is X required to be registered for VAT, in UK or EU country?
3. Are Sales lists required?

Grateful for advice!

AK

by **Generix** on Mon Oct 24, 2011 9:12 am

AvocadoK wrote:Trader X is based in the UK.
X buys used cooking oil from South Africa and sells direct to business customers in the EU (not UK). The oil goes direct from South Africa to EU customer, not via the UK.

Assuming this is the only business activity of X, and turnover exceeds £73k
1. Is the oil zero rated?
2. Is X required to be registered for VAT, in UK or EU country?
3. Are Sales lists required?

Grateful for advice!

AK

Quite simply it depends on the incoterms.

Any sale but DDP will mean no EU VAT issue for the seller.
A DDP sale will mean import VAT is chargeable to your client and the sale in the country of import would be domestic.

(technically its not the incoterm which is important, but in such cases if you look to the incoterm as a first point of reference then you will usually find that the VAT treatment follows the incoterm rules).

by **AvocadoK** on Mon Oct 24, 2011 7:18 pm

Thanks Generix
Assuming then that sales will not be DDP, and no VAT is chargeable, does that mean the trader is not required to register for VAT in the UK? Can he register as a voluntary trader?
Thanks again
AK

by **Generix** on Tue Oct 25, 2011 9:42 am

AvocadoK wrote:Thanks Generix
Assuming then that sales will not be DDP, and no VAT is chargeable, does that mean the trader is not required to register for VAT in the UK? Can he register as a voluntary trader?
Thanks again
AK

No requirement to register, but voluntary is possible.

All you need to be careful of is making sure your client isn't the importer of record in the EU member state of import - despite the incoterms perhaps suggesting otherwise.

by **AvocadoK** on Thu Oct 27, 2011 7:49 am

That's great, thanks Generix.
AK

by **carlo** on Wed Mar 07, 2012 9:55 am

AvocadoK wrote: and no VAT is chargeable
AK

Is this situation applicable to UK either? Or outside the UK only? For example, when speaking about goods which would normally be zero-rated or exempt when supplied in the UK (books, children's clothing and some food)?

by **Generix** on Wed Mar 07, 2012 11:12 am

carlo wrote:
AvocadoK wrote: and no VAT is chargeable
AK

Is this situation applicable to UK either? Or outside the UK only? For example, when speaking about goods which would normally be zero-rated or exempt when supplied in the UK (books, children's clothing and some food)?

Are you asking whether my comments also apply to a UK delivery?

If so then my comments are still applicable, so long as your customer is the one clearing the goods for import then you should have no issue, no matter what the liability of the goods.

by **Iventus** on Mon Mar 12, 2012 8:39 am

Thanks, Generix!
This is a great advice! You helped me to fix my problem!

by **Kitty Kat** on Mon Mar 12, 2012 5:59 pm

As Generix has covered the VAT side, can I now ask: where is the market for used cooking oil? Is it for fuel?

by **Generix** on Mon Mar 12, 2012 6:19 pm

Damn, didn't even really take note of what the product was.

The importer may need to consider whether any excise or other Duty also applies if, as Kitty highlights, it is used for e.g. vehicle fuel.