A. There are two factors to take into account here; firstly the place of supply, and then, if that is the UK, the liability.
The place of supply for a business to consumer (B-C) supply of work to that customer’s goods is determined by where that work is carried out. As the work is being done in the UK, we need to look at liability, as the supply is not always standard rated.
Where goods are obtained in the UK to be worked on and then exported from the EU, the supply of the work is zero-rated. Notice 741A sets out the conditions in paragraph 16.9 as follows:
“Work on goods for export from the EU is zero-rated provided that all of the following conditions are met:
- the goods on which the work is to be carried out must have been obtained, acquired within, or imported into the EU for the purposes of being worked on
- the goods must not be used in the UK between the time of leaving the supplier’s premises and exportation
- on completion of the work, the goods are intended to be and, in fact are, exported from the EU by either
- the supplier of the service (or someone acting on their behalf)
- the customer (or someone acting on their behalf), if the customer belongs outside the EU”
As the car is intended to be kept in the UK for the customer’s use when he visits his holiday home the supply will be standard rated.
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