VAT and Purchases from Outside the UK
For help/advice on VAT
please email Corporate Accounting
on VAT@exeter.ac.uk
Room 254, Northcote House
General Overview
Most goods and services purchased are subject to VAT at the relevant rate whether the supply is in the UK or outside the UK.
Import duty is also charged for goods purchased from outside the EU. The VAT charged (input tax) may, or may not, be fully
recoverable depending on the activity being carried out.
Goods
All goods entering the UK from outside the EU are liable for import duty and VAT at the applicable rates (see VAT and
Purchases guidance for VAT rates).
Duty is calculated on the declared invoice value of the goods entering the EU. Universities may apply for relief from import duty
for scientific research. Relief can also be claimed for equipment used in medical and veterinary research, training and diagnosis.
When duty relief is granted, VAT relief will also apply.
Import duty and VAT will be charged at the point of entry into the UK (i.e. Airport or Port). The carrier handling these goods will
normally require payment before the goods are released.
Goods entering the UK from other EU member states will not be charged duty as goods can move freely within the EU without
charge. VAT will be charged by Finance Services on taxable items at the standard rate and will be paid over to H M Revenue and
Customs in the quarterly VAT returns.
In order to clarify whether VAT is liable on goods the table below outlines the HMRC rules. Where the supply takes place in the
UK, VAT is chargeable:
If your supply involves…
Then your supply takes place…
goods located in the UK when supplied
the importation of goods by you, or under your directions, from outside the EC
goods located outside the UK when supplied
goods you install or assemble in the UK
goods you install or assemble outside the UK
in the UK.
in the UK.
outside the UK.
in the UK.
outside the UK.
Services
This section explains how to determine the place of supply of the services you receive from outside the UK and who must
account for any VAT. For VAT purposes the place of supply is the place where a supply is treated as being supplied, or made.
This is the place where it is liable to any VAT.
It is essential that you think carefully about the nature of any services that you receive. You must have a clear understanding of
the nature of services before you can identify the appropriate place of supply rule.
It is assumed that services are made where the customer belongs (this is known as the basic rule) and VAT will be reversed
charged by Finance Services, unless any of the services are covered within the special rules. The basic rule will only apply if a
supply of services cannot be seen to fall under any of the special rules.
VAT will be reversed charged on all eligible services regardless of whether the supplier would be VAT registered if UK based.
This means VAT will be reverse charged on supplies made by individuals and companies where the place of supply is the UK.
The table overleaf details some of the types of services which have special rules and the appropriate VAT treatment.
June 2014
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Type of Service
Services relating to land and property
The place of supply of services that relate to land or property are where the land
itself is located, irrespective of where the customer or supplier belongs.
Examples of land related services are:
 Hotel accommodation
 Exhibition stands
 The supply of plant or machinery, together with an operator, for work
on a construction site.
 Services of estate agents, auctioneers, architects, surveyors, engineers
and similar professional people relating to land.
 Legal services such as conveyancing or dealing with applications for
planning permission.
 Packages of property management services.
Passenger transport
The place of supply of passenger transport is where it takes place.
Restaurant and catering
The place of supply of restaurant and catering services is where the services are
physically carried out
Events
The place of supply of admission to an event is where the event takes place,
irrespective of where the customer or supplier is located.
Examples include
 Entertainment and cultural performances
 The right to attend exhibitions, conferences, meetings or seminars
 Ancillary services such as payments for cloakrooms or similar facilities
VAT Treatment
VAT is due in the country where the land
itself is located, therefore it will be added
(if appropriate) to the invoice by the
supplying company.
If the land is located in the UK but the
supplier belongs outside the UK, VAT will
be added by the Finance Services.
VAT is due in the country where the
supply of passenger transport takes place
VAT is due in the country where the
services are physically carried out
VAT is due in the country where the event
takes place
Why is VAT added by Corporate Finance?
Normally, the supplier of a service is the person who must account to the tax authorities for any VAT due on the supply.
However, in certain situations, it is the customer who must account for any VAT due.
In practice this means we have to charge VAT to ourselves (and pay over to HMRC in our quarterly VAT returns) on relevant
goods and services purchased from other EU member states and services received from outside the EU.
Goods purchased from outside the EU will have the relevant VAT and import duty charged at the point of entry into the UK
(normally by the carrier).
Further information can be obtained from:
HM Revenue & Customs website: www.hmrc.gov.uk
Notice 741 - Place of Supply of Services
June 2014
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