25 Mar 2018

VAT impact on goods traded overseas

07 March 2018

The ins and outs of VAT


  • An article for students of ATT Papers 3 and 6 and those studying for the CTA Awareness VAT Module.
  • The important distinction between the UK, EU and ‘rest of the world’.
  • Evidence of the export of goods is essential when 
    zero-rating for this purpose.
  • The customs declaration form C88 must be completed at the port when importing goods from outside the EU.
  • The tax point is important because it determines the VAT return on which the sale will be reported.
  • The EC Sales List is usually submitted quarterly within 14 days of the quarter end.

The aim of this student article is to explain in simple terms the way VAT operates on goods being sold to overseas customers and purchased from overseas suppliers. This should be useful for students preparing for ATT Papers 3 and 6 as well as those studying for the CTA Awareness VAT Module.

For VAT purposes, we can consider that the world is divided into three parts, as shown by The VAT World.

The VAT World



The UK comprises England, Scotland, Wales, Northern Ireland and surrounding territorial waters and (for VAT purposes only) also includes the Isle of Man. But let’s start with by considering transactions between the UK and the Rest of the World.

Rest of the World






All sales of goods to customers in the rest of the world are called ‘exports’ and are zero-rated. This is regardless of how they would be ...

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