VAT on exports

Hello, I am a UK based customer and want to buy a machine that will be directly exported by the vendor themselves without me consuming or taking delivery of the machine here in the UK. The vendor says that VAT will be refunded back to me directly once they receive the export documents from the logistics company. On VAT notice 703 section 4.1 I read that the supply from the vendor to myself is in the UK so it is subject to VAT. Which means in order to claim the VAT back due to the export, I must register for VAT and claim the VAT as an input tax on a return. Please can someone clarify if section 4.1 on VAT notice 703 is applicable to my scenario? As both options ultimately lead to the same result in me being refunded the VAT, however one being a bit more long winded than the other. Thank you.

Hi,
If you are selling goods to an overseas customer and the UK supplier is sending the goods themselves without you taking physical possession of the goods here then then are 2 transactions taking place.
The first transaction will involve a UK taxable supply from the supplier to you and then an export by you to your customer.
Section 4 of Notice 703 would then apply and you would need to become VAT registered in order to reclaim the UK VAT charged to you.
Thank you.

Hi, thank you very much for getting back to me. The goods are intended for resale, but not at the first instance where for example I will be invoicing a customer overseas who will take delivery of the goods. Rather, placing the goods through a relevant overseas marketplace at a later date for sale. As I think section 4.1 on VAT notice 703 mentions an overseas buyer places an order with me directly, however this is not the case. So was just wondering would section 4.1 still apply if I wanted to sell the goods overseas but have not got an overseas customer yet, but the machine is still being exported directly from the supplier nonetheless?

Section 4.1 of VAT Notice 703 applies as the supply is being made in the UK and is subject to VAT. If the vendor is handling the export and refunding VAT upon receipt of export documents, you don’t need to register for VAT. However, if VAT is charged and not refunded directly, you would need to register and reclaim it as input tax. Confirming the vendor’s process for handling export VAT is advisable.

 

Hi. If you don't yet have a customer who are buying the goods yet then who is the importer of record for the goods arriving in the UAE as they will be the owner of the goods at that point. If the importer is the owner of the goods at that point then I 'm assuming a sale between you and that company has taken place before the goods arrive in the UAE . Thank you .

The importer is an associate of mine who has a company in the UAE that can import the goods on my behalf because apparently I cannot go there and do it myself as I do not have a registered company there. That’s how it works over there I am told. So there is no sale/purchase agreement between me and him. He has agreed to register the goods on his name and I can sell it to whomever else and keep the proceeds. I could possibly pay him a commission if that is of any relevance.

Hi,
We would refer you back to the guidance below:
Conditions and time limits for zero rating
Conditions for zero rating in specific circumstances
The onus is always on the supplier to apply the correct guidance.
Thank you.