VEXP60300 - Stores for use in ships, aircraft or hovercraft: Conditions governing the supply of ships' stores
The nature of the goods covered by the term ’stores’ is such that some of them will be partly consumed within UK territorial waters (ie within 12 nautical miles of the coastline as defined in the Territorial Seas Act 1987) or UK airspace. In view of this special conditions for zero rating apply.
Businesses making supplies of ships’ stores may zero rate the transactions provided that the stores are to be shipped from the UK within three months of the time of supply for use on a voyage or flight made for a non-private purpose to an eventual destination outside the UK and
- When placing the order the person to whom the goods are to be supplied declares in writing that the goods are for use as stores on a voyage or flight which is to be made for a non-private purpose.
- The supplier obtains and holds a written order or confirmation given by the master, commander, owner or duly authorised agent of the ship or aircraft. This must include a declaration that the goods are solely for use as stores on a named ship or aircraft that is entitled to receive duty free stores for the voyage in question, i.e. to an eventual destination outside the UK. Aircraft making through international flights are eligible to receive VAT free stores even if the aircraft makes one or more stops in the UK in the course of such a flight.
- The supplier sends the goods
- direct to the ship or aircraft, or
- through freight forwarders for consolidation and delivery direct to the ship or aircraft, or
- addressed and delivered to the master of a named vessel c/o the shipping line or agent.
- The supplier obtains and holds a receipt confirming delivery of the goods on board the ship or aircraft, signed by the master, commander or other responsible officer of the ship or aircraft. Applications from individual airlines requesting permission for the certificate to be signed by a responsible official of the airline (usually the Duty Engineer) may be allowed subject to approval by HMRC and on condition that
- the signatory is in a position to issue the certificate based on personal knowledge of the flight details, and
- the airline maintains adequate documentation to enable HMRC staff to verify their entitlement to relief.
- Where the supplies are made to an eligible vessel or aircraft direct from a bonded warehouse not operated or owned by the supplier, they hold a certificate of export as described in paragraph 7.10 of Notice 703 Export of goods from the United Kingdom. An advice note issued by the warehousekeeper normally serves this purpose.
If suppliers fail to meet the conditions governing the supply of stores, they must not zero rate the supply and must account for VAT as appropriate. If they subsequently obtain the necessary statements and receipts or certificates, they may adjust their records and zero rate the supply.
Re-landed stores
Stores supplied under the conditions of this section which are re-landed in the UK are treated as imports and the procedures in IMPS Imports should be followed.