Transport, transport infrastructure and services

Special VAT considerations for the transport and transport services sector

If you sell new vehicles in a European Union (EU) country, transport goods, or move vehicles across international borders, you must comply with specific VAT rules in each case. The rules are complex and it's a good idea to check with HM Revenue & Customs (HMRC) which regulations apply to your particular circumstances. You can call the HMRC VAT Helpline on Tel 0845 010 9000.

VAT for freight-transport businesses

The rules covering VAT for freight transport are complex. Freight-transport services must carefully consider the VAT that should be charged to customers on a case-by-case basis. This will depend on:

  • the type of transport service you're providing
  • the country or EU member state in which any part of the service is being provided

Read Notice 744B - VAT guidance on VAT issues for freight-transport businesses and related services on the HMRC website.

VAT treatment of new vehicles

If you buy or sell:

  • a ship more than 7.5 metres in length
  • any aircraft with a take-off weight of more than 1,550 kilograms
  • any motorised vehicle with a cylinder capacity (cc) of more than 48cc or that is electrically propelled using more than 78.2 kilowatts

You'll have to account for VAT and complete form VAT 411. In simple terms, VAT is zero-rated, but you must account for the VAT whether the purchaser is VAT-registered or not.

Read Notice 728 on the VAT treatment of new means of transport on the HMRC website.

If you're importing a vehicle temporarily into the UK, you may be able to claim relief on import duties and VAT. Read Notice 308 on the temporary admission to the UK of non-European Community (EC) means of transport on the HMRC website.