Guide to exporting from the UK within the EU

Exporting is great!

That’s the message the government is sending out to try and get UK businesses of all shapes and sizes trading across the globe, and it’s a message we’ve long been behind – check out our Guides & How To section for information on trading in over 70 countries worldwide and the simplest way to set up a conference call to keep in touch with your international customers, clients and colleagues.

The trouble is, if you’re thinking of branching out and exporting your goods or services, it can be difficult to know where to begin – so check out our two-part guide on exporting from the UK.

First up, exporting to countries within the European Union (EU)…

Exporting to the EU

Product standards and regulations are generally uniform across most of the EU member states, so if you already sell products within the UK it’s unlikely you’ll have to make any adjustments to sell them in the EU as it’s likely they’ll already comply.

It’s also worth noting there’s a bit of jargon that floats around where exports to the EU are concerned.

The first is that the export of goods within the EU is called ‘dispatches’.

The next is goods that are circulated within the EU are in ‘free circulation’ – this is a good one to remember as it means there are no customs checks and you don’t have to pay duty.

‘Free circulation’ also applies to goods outside of the EU, but only if duty has been paid on them.

And while you don’t have to pay duty on goods exported around the EU, you can’t discount the dreaded value added tax (VAT)…

When exporting goods to within the EU, you must do the following to stay on the right side of the UK’s VAT rules:

• record all the goods sold to EU countries on your VAT return
• fill in an EC Sales List
• fill in an Intrastat Declaration if your total dispatches are worth more than £250,000

And it’s worth noting the rules on VAT vary depending upon whether or not your customer is VAT registered in their own country.

VAT registered

If your customer is VAT registered in their own country they’ll pay the equivalent to VAT at their country’s rate, and you don’t pay any VAT as goods provided to a someone registered for VAT in another EU country are zero-rated.

In order to take advantage of this zero-rating on VAT, you’ll need your customer’s VAT registration number for your VAT return and the paperwork to prove the goods have been sent within a certain time limit, which is usually three months.

Here’s how to check if an EU VAT number is valid.

Not VAT registered

VAT on services within the EU

If you provide services to business customers within the EU, you won’t need to charge VAT as the customer is responsible for paying VAT in their country.

If, on the other hand, you provide services to non-business customers within the EU, you need to charge VAT at UK rates.

You’ll need to bear in mind though, there are different rules for some types of service, including:

• hiring transport
• land and property services
• ‘electronically supplied services’ where there’s nobody directly involved in providing them, eg web hosting or music downloads
• events
• restaurant or catering services

Duty on dispatches within the EU

Goods that are produced in the EU and sent within the EU are in free circulation, which means you don’t have to pay duty on them.

And this also applies to goods from outside the EU if duty has already been paid on them, so if, for example, and exporter buys mopeds from China and pays duty on them when bringing them into the UK, they are now in free circulation and can be exported to anywhere in the EU without paying a penny more in duty.

If duty hasn’t been paid on any goods arriving from outside the EU,  you have to follow the rules for importing goods from non-EU countries.

Commodity codes

If goods aren’t in free circulation, you’ll need a commodity code, which classifies your goods for duty, tax rates and regulations, such as licences, for example.