VATF36330 | What to consider prior to determining whether to use an intervention: matters to consider when looking at particular types of taxable person or activity: conduit traders: types of conduit trading

Goods traded in the UK prior to export - (e.g. UK importer/acquirer supplies UK buffer, who supplies UK exporter)

The goods are sold between UK entities. In some instances there are one or more buffer traders between the UK importer/acquirer and the UK exporter/dispatcher. In other cases, goods are sold directly by the UK importer/acquirer to the UK exporter/dispatcher. If the goods involved are CPUs or mobile phones then VAT should be accounted for under the reverse charge, subject to the de minimis limit (the reverse charge does not apply where the VAT exclusive value of the supply is below £5,000). For further information on the reverse charge see VATF44200.

The goods will then be sold on to either a conduit trader or a defaulter outside the UK. Somewhere later on in the chain there will be a fraudulent default outside the UK.

Goods enter the UK and are then supplied directly to a trader outside the UK

This is a variation where the goods are acquired or imported into the UK but are not supplied between UK traders. The UK conduit trader accounts for and reclaims acquisition tax or import VAT plus any VAT incurred on UK overhead expenses. The goods are then exported/dispatched to either a conduit trader or defaulter outside the UK.