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The law relating to the zero rate for transport and related to services connected with imports and exports is in the VAT Act 1994, Schedule 8, Group 8, item 11(a).

Item 11. The supply-

(a) of services consisting of

(i) the transport of goods to or from a place—

(a) from which they are to be exported to a place outside the United Kingdom, or

(b) to which they have been imported from a place outside the United Kingdom,

(ii) the handling or storage of those goods at the place from which the goods are to be so exported, or the place to which they have been so imported, or

(iii) the handling or storage of those goods in connection with their transport to or from that place, or

(b) to a person who receives the supply for the purpose of a business carried on by him and who belongs outside the United Kingdom, of services of a description specified in paragraph (a) of item 6, item 6A, item 9 or paragraph (a) of item 10 of this Group.

Interpretation

Item 11(a) of Group 8 zero-rates certain services, with a place of supply in the UK (see VATPOSTR), which are connected with goods which have been imported from, or are to be exported to, a place outside the UK. Relief under this item is confined to services which have a direct connection with an actual movement of goods which are imported or exported, so it does not extend, for instance, to long term storage or other services unconnected with the movement of the goods.

Zero-rating can apply whether supplies are made by the main contractor or a sub-contractor, and also applies to freight forwarders who buy in these services and sell them on as principals.