VAT on Freight Services UK shipping, US Billing

[sharon_davies]

Hello

Our parent company has recently signed a global contract for all invoicing to be billed in the US. Presently we are invoiced by the contractor in the UK, paying VAT on UK services (shipping from UK warehouse to UK Destination/Businesses). We apply normal VAT rules and complete VAT Returns (Outputs/Inputs). Our parent company in the US have been advised they will no longer be charged VAT for UK freight services from UK Warehouse to UK Destination. Is this correct? I

Our parent company will charge back all the freight via inter company on a monthly basis, but if they are charged VAT; we will not be able to claim this back; nor do we want to see a 20% increase in costs. Our parent company are not UK VAT registered.