You don’t have to pay duty and there are no customs checks when sending goods within the European Union (EU). The goods are in ‘free circulation’.
This also applies to goods from outside the EU but only if duty has been paid on them. For example, an importer brings bicycles from China into the UK and the duty has already been paid on them. They are now in free circulation. You can buy the bicycles and dispatch them to France without paying duty on them yourself.
Regulations and product standards are the same in most EU member states. If you sell products in the UK, it’s likely that you already comply with standards in other EU countries - eg security for electrical goods. Find out more about European standards and your products.
Paying VAT on goods exported within the EU
When exporting goods within the EU, you have to:
- 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
If your customer is VAT registered
If your customer is VAT registered in their country, they’ll pay the equivalent to VAT for the goods at their country’s rate. You don’t pay any VAT, as goods sent to someone who is registered for VAT in another EU country are zero-rated.
You’ll need your customer’s VAT registration number for your VAT return and paperwork proving that the goods have been sent. The time limit for this is usually three months. Read more about selling to someone who is VAT registered in another EU country.
Find out how to check if an EU VAT number is valid
If your customer isn’t VAT registered
You normally have to pay UK VAT on goods you export to customers who aren’t VAT registered. You’ll only be exempt from paying VAT if you’re responsible for delivering the goods and their value is above a certain amount called the ‘distance selling threshold’. In this case your customer covers the VAT.
Paying VAT on services exported within the EU
You need to charge VAT at UK rates on most services to non-business customers within the EU. If you supply services to a business customer in the EU, you don’t need to charge VAT - the customer is responsible for paying VAT in their country.
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
- restaurant or catering services
Paying duty on exports within the EU
Goods that have been produced in the EU and are then sent to another EU country are in free circulation, so you don’t have to pay duty on them.
This also applies to goods from outside the EU if duty has already been paid on them.
If duty hasn’t been paid on goods arriving from outside the EU you have to follow the rules for importing goods from non-EU countries.
You need a commodity code for goods that are not in free circulation. The code classifies your goods for duty, tax rates and regulations, eg licences.
The UK Trade Tariff is an online tool that lets you search for import and export commodity codes and for tax, duty and licences that apply to your goods.
You should check if you need a strategic export licence for some controlled goods, eg military, defence or security related goods. This also covers dual use goods that can be used for both civil and military purposes, eg some software. You can apply for a strategic export licence using SPIRE.
Know your legal responsibilities
- Do you need a licence?
- Get the right business insurance
- Comply with the law when providing goods and services
- Know your customers' rights
- Distance and online selling rules
- Understand pricing legislation
- Buying goods from outside NI
- Selling goods outside NI
- GDPR compliance checklist
- Pay your business rates
- Understand staff contracts and your responsibilities
- Taking on contractors and subcontractors
- What you need to do about health and safety
- Know your legal obligations on pensions
Understand tax and VAT
Sell and market your products or services