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Where Taxpayers and Advisers Meet

VAT Claim on Exported Goods

shazz
Posts:2
Joined:Tue Apr 06, 2021 11:35 pm
VAT Claim on Exported Goods

Postby shazz » Wed Apr 07, 2021 2:44 am

Hi,

New to this amazing forum and trying to grasp an idea of how VAT works.

So we are thinking of purchasing and selling goods from the UK to a non-EU country as there's substantial demand but very little supply of these goods. As I have read and understand, once VAT registered, we can claim input VAT paid to acquire these goods by zero-rating them. But what I'm trying to get my head around are the followings:

1. Our output VAT will be next to nothing (due to only selling to non-EU clients) but input will be very high, can we still claim the VAT we have paid with no collection whatsoever?

2. Can we claim VAT on other business expenditures as well? i.e VAT paid on commercial/business vehicle?

Would really appreciate it if someone can shed light on these questions and please feel free to add any other information you think might be useful.

Thanks!

robbob
Posts:3079
Joined:Wed Aug 06, 2008 4:01 pm

Re: VAT Claim on Exported Goods

Postby robbob » Wed Apr 07, 2021 9:03 am

1. Our output VAT will be next to nothing (due to only selling to non-EU clients) but input will be very high, can we still claim the VAT we have paid with no collection whatsoever?
You should be fine if your sales do not include large proportion of exempt sales - exports are zero rated and as such you can claim all inpout vat back even though your sales are zero rated and have no vat.
2. Can we claim VAT on other business expenditures as well? i.e VAT paid on commercial/business vehicle?
Yes for same reason as above subject to normal rules - input vat should be reduced for private use on van purchase presuming private use is more than minimal.

shazz
Posts:2
Joined:Tue Apr 06, 2021 11:35 pm

Re: VAT Claim on Exported Goods

Postby shazz » Wed Apr 14, 2021 2:58 am

Thank You.

I have another question would appreciate it if you or someone could answer

Can we zero rate exported cars/vehicles and claim input tax incurred to purchase them?

les35
Posts:603
Joined:Wed Aug 06, 2008 3:09 pm

Re: VAT Claim on Exported Goods

Postby les35 » Wed Apr 14, 2021 8:59 am

Yes. The previous question included vehicles. Do note that, if you buy vehicles from private persons, there will be no input tax to claim.
And many second hand vehicles are eligible for the margin scheme, so VAT is not shown. You could ask the dealers not to apply the margin scheme, so the VAT is recoverable.

robbob
Posts:3079
Joined:Wed Aug 06, 2008 4:01 pm

Re: VAT Claim on Exported Goods

Postby robbob » Wed Apr 14, 2021 9:00 am

Can we zero rate exported cars/vehicles and claim input tax incurred to purchase them?
Ref cars
I have never looked specifically at car exports before but genrally speaking you can claim back all vat back on items that relate to zero rated sales - so i can't think of any normal reason why not specifically due to the fcat the car is being exported. Note normal caveats ref claiming vat on cars would apply.

Unfortuantely rules for cars can be very quirky - the main issue here i suspect is that i doubt very much that its a given that you will specifically be charged vat on cars you buy - there is a specific term used here that confirm the car is a "vat qualifying car" - most used cars are sold without vat being charged or sold under margin scheme - for both those routes you won't be charged vat.

You also have the additional issue that there are additional restrictions ref claiming vat on car purchases that generally stop any input vat claim being made (even when billed) - if the car is "available for private use including commuting" then you won't be allowed vat reclaim in the fisrt place whether car is exported or not !!
If you do buy an hold cars in stock for exporting be careful how they are made available to be used in the meantime!!

Note as advised at the outset car rules are quirky and somewhat hard to follow even for experienced bods - so small chance i could be missing something specific ref your question.

Ref commercial vehicles - i cant think of any problems claiming vat back on these - same logic applies if sale is zero rated you can claim vat back on the purchase - again be careful to check you have specifically been billed vat - commercial vehicles are sometimes sold on margin scheme and if that is the case you wouldnt have a valid vat invoice.


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