Goods and services consumed in the UK are subject to VAT. When businesses export goods (including to EU countries after January 1, 2021) and therefore the goods are “consumed” outside the UK, the VAT can be zero-rated if certain conditions are fulfilled. These conditions are as follows:
- Businesses must hold evidence to prove that they are entitled to zero rating.
- Businesses must adhere to defined time limits in which the goods must be physically exported from the UK.
- Businesses must obtain evidence of export within defined time limits to support zero rating.
For more detailed information on the conditions and how to apply zero VAT rate, refer to VAT Notice 703.