|
Customers sometimes query how we determine the VAT rate they are charged for our services. Since the rate charged can vary, it is an important question and one we have set out to explain below. The VAT rate that we apply to your transaction with us is determined in accordance with the appropriate rules relating to the implications of each particular booking. Although the majority of transactions are straightforward and include the UK VAT rate of 17.5%, there are instances where this rate can vary. There are three types of movements that have influence on determining the applicable VAT rate: - Domestic (parcel movements within the UK)
- Intra-EU (parcel movements within the EU community)
- International or non-EU (parcel movements taking place outside the EU)
Additionally, there are three types of customers to be considered when determining the appropriate VAT rate for Fast Lane’s services: - Private Individuals
- EU Tax-Registered Businesses
- Non-EU Business and Private Individuals
Furthermore, each EU country has different VAT treatments in relation to VAT issues. This can also affect the applicable VAT rate. This issue over which country’s VAT rate should be applied is in some cases a complex issue, but one that Fast Lane’s online service calculates for you. Under EU rules that have been universally adopted, the country’s VAT that should be applied depends on the ‘Place of Supply Rules’ as far as freight transport is concerned. If the place of supply is UK, then UK VAT should apply and if the place of supply is, for example, Austria, then Austrian VAT should apply. The basic rule is that the ‘place of supply’ is where the goods commence their journey. However, if you are an EU business with an EU VAT number, then the place of supply is where the client is based. Examples:Example 1: An Irish customer wishes to move a parcel from Ireland to Sweden. What VAT rates apply? Answer: If the customer is a private individual, the place of supply is Ireland and Irish VAT is charged, accounted for and paid over to the Irish tax authorities. If the Customer is an Irish VAT-registered business, the place of supply is still Ireland as this is where the Customer who has the VAT number is based. As such, we would issue a UK invoice showing on the invoice the Irish VAT number of the client under the name and address. Zero UK VAT would be applied and the invoice would be endorsed: ‘Reverse charge to apply, recipient to account for Irish VAT.’ Example 2: The same Irish customer now wishes to move a parcel from Germany to France. What VAT rate applies? Answer: For the private individual customer, we would charge the applicable German VAT rate, account for it and pay it over to the German tax authorities. If the customer is an Irish VAT registered business, then Irish VAT would apply - as the place of supply in this case is where the VAT registered company is based (which in this case is Ireland). We would again issue a zero UK VAT invoice showing on the invoice the Irish VAT number of the client under the name and address. Zero UK VAT would be applied and the invoice would be endorsed: ‘Reverse charge to apply, recipient to account for Irish VAT.’ For UK customers of our parcel delivery services wishing for example, to move a parcel from the UK to any other EU country, the UK VAT rate of 17.5% would apply to both private individuals and VAT-registered businesses. For UK customers wishing for example, to move a parcel from Belgium to Luxembourg, the private individual would be charged the Belgium VAT rate, while the UK VAT-registered business would be charged the UK VAT rate as the place of supply in this case is where the VAT-registered business is based (the UK). If you are in doubt, or have any questions regarding the appropriate VAT rate you will incur on a particular parcel delivery, please contact us. Get An Instant QuoteIf you’d like to find the cheapest way to send parcels, use our parcel delivery instant quote system and we’ll get you the best prices from a selection of leading courier companies. Where Next? |
