Import - Export to and from the EU Post Brexit - VAT and Tax Questions

Question: We are currently getting charged VAT at 5.5% of the value of the goods on the lorry every time we cross the EU border in order to gain passage into the EU. We are then passing this onto the customers on their invoices in order that they can claim it back. The complication however occurs that these customers are not necessarily the importer as we export to one importer company who then distributes the goods from there once they are in the EU as it states in the legislation that the importer does not have to be the end user.

The questions we have are: 1) Are we doing it right? (according to some customers they are buying lambs from other suppliers and are not being charged the 5.5% VAT on their invoices) 2) Do we have to pay this tax in order to gain passage? 3) Is there a problem that the tax is being paid in the EU from a UK company? it has been said by some at customs that they fear we will have trouble claiming this back as we are not in the EU (even though we will not be claiming it back directly, the customers will be the ones who are claiming it back) At the moment it is a large amount of money per load, especially given current lamb prices and some clarity on the issue would be gratefully received as we dont want to be in a position where we are unknowingly doing the wrong thing and will struggle to claim this money back.

Answer:  

From the information provided, I have assumed that VAT is being charged at 5.5% by an EU Member State / EU VAT-registered business, as there is no such VAT rate in the UK. If this is the case then we cannot comment on the VAT treatment, as this would need to be clarified with the VAT authorities in the relevant EU Member State. From 1 January 2021, UK businesses that wish to claim back VAT incurred on expenses in the EU will have to use the existing processes for non-EU businesses. As this varies across the EU, they will need to follow the procedure set out by the country from which they’re making the clam. Please refer to the following guidance for further information: https://www.gov.uk/guidance/refunds-of-uk-vat-for-non-uk-businesses-or-eu-vat-for-uk-businesses

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