Charge, reclaim and record VAT

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When not to charge VAT

You cannot charge VAT on exempt goods or services.

If you buy or sell an exempt item you should still record the transaction in your general business accounts.

Some examples of VAT-exempt goods and services are:

  • financial services, investments and insurance
  • garages, parking spaces and houseboat moorings
  • property, land and buildings
  • education and training (excluding private schools)
  • healthcare and medical treatment
  • funeral plans, burial or cremation services
  • charity events
  • antiques
  • gambling or lottery tickets
  • sports activities

Read the full list of VAT exempt goods.

Goods and services that are 鈥榦ut of scope鈥�

Some goods and services are outside the VAT tax system (鈥榦ut of scope鈥�) so you cannot charge or reclaim the VAT on them. For example:

  • goods or services you buy and use outside of the UK
  • statutory fees, like the
  • goods you sell as part of a hobby, like stamps from a collection
  • donations to a charity, if given without getting anything in return

Charging VAT to charities

VAT-registered businesses can sell certain goods and services to charities at the zero or reduced rate of VAT.

Find out what qualifies for the reduced rate.

If you鈥檙e a VAT-registered business, it鈥檚 your responsibility to check the charity is eligible, and to apply the correct rate.

Community amateur sports clubs do not qualify for VAT reliefs for charities.

Check the charity is eligible

Ask the charity to provide you with evidence that they鈥檙e a charity. This can be either:

  • their Charity Commission registration number
  • a letter of recognition from HM Revenue and Customs (HMRC) if they鈥檙e not registered with the Charity Commission (for example if they鈥檙e a charity in Scotland or Northern Ireland)

Get a written declaration

You also need to ask the charity to give you a written declaration or certificate confirming it meets the conditions for the particular VAT relief.

Charities must follow a particular format for the declaration or certificate. The declaration must be separate from the order form or invoice.

You must keep any declarations or certificates for at least 4 years.

View a printable version of the whole guide

Part of Export goods from the UK: step by step

  1. Step 1 Check if you need to follow this process

    Follow these steps if you're moving goods permanently from:

    • England, Wales or Scotland (Great Britain) to a country outside the UK
    • Northern Ireland to a country outside the UK and the EU

    What you need to do is different if you are:

  2. Step 2 Check the rules for exporting your goods

    1. Check duties, rules and restrictions for your goods in the destination country

  3. and Apply for any licences you need to export your goods

    There are special rules and you may need to get licences or certificates if you are exporting any of the following:

  4. Step 3 Get your business ready to export

    You need an EORI number that starts with GB to export goods from England, Wales or Scotland.

    If you move goods to or from Northern Ireland you may need one that starts with XI.

    1. Get an EORI number
    1. Check if you need to register for VAT

    There are processes that can make clearing customs quicker and easier to manage if you export goods regularly.

    1. Find out about using simplified declaration procedures
    2. Check if you can use Common Transit to move your goods
    3. Check if Authorised Economic Operator status is right for you

  5. and Check whoever's receiving the goods can import them

    The business or person receiving the goods may need:

    • to make an import declaration in their country
    • licences or certificates to receive goods from the UK

    Check whoever you are sending the goods to is able to import them into their country.

  6. Step 4 Decide who will make export declarations and transport the goods

    You can hire someone to deal with customs and transport the goods for you, or you can do it yourself.

    1. Find out how to hire someone to deal with customs for you
    2. Find out how to make export declarations yourself
    3. Find out how to transport goods out of the UK by road

  7. Step 5 Classify your goods

    You must find the right commodity code to classify the goods you're exporting.

    Your customs agent or transporter might be able to help you with this.

    1. Find the right commodity code for your goods

  8. Step 6 Prepare the invoice and other documentation for your goods

    The completed invoice and any licences or certificates must travel with the goods.

    When filling in the value of your goods on the invoice, use the price you鈥檙e selling them for. If you're not selling the goods, use the market value of the goods. List any freight or export insurance you included in the price separately.

    You may need proof of origin if exporting to a country where your goods have a reduced or zero rate of duty.

    1. Get proof of origin for your goods

    You might be able to zero rate the goods for VAT. This means you can charge your customers VAT at 0%.

    1. Check if you can zero rate the goods for VAT

  9. Step 7 Get your goods through customs

    If you've appointed someone to deal with UK customs for you, they'll make the declaration and get your goods through the UK border.

    1. Make an export declaration and get your goods cleared by UK customs

    You may need other documentation to get your goods into the destination country. Ask the person or business buying your goods what information you need to provide.

    1. Check how to bring goods back into the UK if they were rejected for import at another country鈥檚 border

  10. Step 8 Keep invoices and records

    You must keep commercial invoices and any customs paperwork.

    If you're VAT registered, record the goods in your VAT accounts even if they are zero-rated.

    1. Find out how to record the goods in your VAT accounts

    If you exported controlled goods, for example firearms, keep the paperwork that shows who owns the goods.