Irish owned machine sent to UK for service (vat on parts or not?)

I have a customer who is based in Scotland. His customer sent him a machine for repair and service. There is a self declaration in place with UK customs. The end user wants to pay for the goods needed to complete the service with me. (Standard Export) However the end user wants me to deliver the goods to Scotland, where the repair will take place and has requested no VAT (as the machine is owned by an irish company) The machine will then be re-shipped to Ireland(ROI) under the declaration. Any advise would be greatly appriciated.

Hi Your enquiry isn’t entirely clear. You have not said where you are sending the goods from. Is this a UK supply from a UK company or an import into the UK? What do you mean by ‘There is a self declaration in place with UK customs’? Is the ‘end user’ the machine owner in Ireland or the repairer in Scotland?

Hi, Sorry for not being clear... I am sending the goods to Scotland from England but invoicing ireland. I have been told that the machine in question has been shipped to a workshop in scotland, (when it left Ireland it had a customs declaration in place to say it still belongs to the Irish company, and was only shipping for repair / service) The machine owner is Irish and the repairer is in scotland.

Ok that’s much clearer. So you are making a supply in the UK to an Irish customer rather than a direct export to Ireland. The goods will only be exported after further processing to repair the machine. You can only zero rate UK VAT if the conditions for zero rating for export are met and you have proof of export from the UK . As the goods are for incorporation / processing prior to export there are additional conditions. Have a look at VAT notice 703 Paragraph 3.6 Conditions for zero rating goods for export after processing or incorporation. You should therefore make sure that you can get the correct proofs of export before agreeing to zero rate the sale.

Hi,

Please see section 3.6 of the the guidance below:

VAT on goods exported from the UK (VAT Notice 703): Conditions and time limits for zero rating

Thank you.