Hello,
I find myself puzzled on a particular subject.
Post-Brexit, we are selling to a UK established business customer on an agreed EXW basis. The products are taken directly to port for export (no UK stop-off point, not even at the customer's location). The customer is providing his UK VAT number for the sale but refusing to pay UK VAT on the basis that the products are exported. I am told the customer is prepared to provide export documentation but I have not obtained any examples yet in order to verify that the named exporter of record is our customer (not us).
On the face of it, this is an indirect export (because of the EXW incoterm). However, indirect exports are described in VAT notice 703 as only exports made to 'overseas persons' defined in para 2.4. as: 'a business person or company who is not resident in the UK' OR 'a business that has no business establishment in the UK from which taxable supplies are made' OR 'an overseas authority'.
Our customer is clearly a UK resident, with a UK address and a UK VAT number. I don't believe it has any foreign VAT numbers. So strictly speaking, this isn't an indirect export situation.
1) Am I right therefore to conclude that for EXW export sales to UK based customers, we must charge UK VAT and the customer cannot refuse this?
2) If the customer insists that he'll make the (correct) export paperwork available, are we as supplier in a safe position for zero-rating our sales?
3) If we set up the customer without their UK VAT number OR obtained a foreign VAT number for the customer, would this mean we can zero-rate our sales?
I'd really appreciate some help! Thanks.
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