VAT Quiz On Buying And Selling Goods In The UK, Eu And Overseas

If a trader is not VAT registered it cannot charge VAT

The correct answer is "Export". In this scenario, a UK business is selling goods to a non-EU business. When a business sells goods to a buyer located outside of its home country, it is considered an export. In this case, since the buyer is located outside of the EU, it qualifies as an export transaction.

No VAT is charged by the trader. The UK trader has to pay the correct UK VAT rate when the goods arrive at the airport or port. They can reclaim this input VAT on their VAT return

There would be no VAT in this scenario as the trader is not VAT registered and cannot charge VAT

Always zero rated because VAT is a tax on goods used in the UK.

The trader must always charge VAT in this scenario

When a UK VAT registered business sells goods to an EU VAT registered business, it must charge VAT at zero rate or 0%. This means that no VAT is added to the price of the goods. This is because the sale is considered an export, and exports are generally zero-rated for VAT purposes. The zero rate allows for the free movement of goods within the EU and promotes trade between member states by eliminating the burden of VAT on cross-border transactions.

When a UK business sells goods to another EU business, this is referred to as "despatch." Despatch is a term used to describe the process of sending or delivering goods from one place to another. In this context, it signifies the movement of goods from the UK to an EU country as part of a business transaction.