VAT rules change for port community services
The VAT rules have changed for some port community systems charges, reports BIFA in its latest newsletter. Some services that were previously zero-rated are now liable to standard-rate VAT, it says.
BIFA advises that freight forwarders can continue to charge the net amount as an invoice disbursement, when handling an international freight movement. This brings the PCS charges in line with a number of disbursements a freight forwarder may incur when organising an international movement.
For example; if a forwarder contracts a UK-based transport company to collect goods from a UK port or airport to deliver within the UK, then VAT is applied by the UK contractor at the standard rate. So long as this service is part of an international freight movement the forwarder can invoice its customer with VAT zero-rated. The forwarder can then recover any VAT applied by a UK contractor for a domestic service through its VAT return.
Source: www.ifw-net.com August 2012