Wait… do I charge VAT to Jersey from the UK? If you’ve asked yourself this question (and then gone down a rabbit hole of confusing tax rules), you’re not alone. Let’s clear this up in this article!
Key Takeaways
UK businesses don’t charge VAT on goods sold to Jersey, but proper export records are required. Digital services may require Jersey GST registration if sales exceed £300,000.
Even though UK VAT doesn’t apply, Jersey customers may still have to pay 5% GST on imports and certain services, so it’s important to communicate this clearly.
Do UK Businesses Charge VAT on Sales to Jersey?
Do you charge VAT to Jersey from UK? No, you don’t charge VAT when selling goods to Jersey because Jersey is not part of the UK for VAT purposes.
Selling Physical Goods to Jersey
You don’t charge UK VAT - Jersey is treated as a separate jurisdiction.
Your sale is zero-rated for VAT, but you must keep export records to prove the goods left the UK.
Jersey may charge its own tax (GST) on imports, so your customers might have to pay a 5% tax when they receive the goods. As of July 2023, GST applies to imported goods valued over £60 (previously £135), and this threshold will eventually be removed altogether.
Selling Services to Jersey
Whether you charge UK VAT depends on the type of service and where the customer is based.
Many B2B services are VAT-exempt under the reverse charge mechanism, meaning the Jersey business handles the tax. Some B2C services may still require UK VAT, depending on the “place of supply” rules.
Jersey VAT rules for services vary by industry, so businesses should check specific tax obligations, including how VAT on services from Jersey to the UK is treated under current regulations.
What About VAT on Digital Services?
If you sell digital services (like e-books, online courses, or software) to customers in Jersey, the VAT rules are different from physical goods.
Since Jersey is outside the UK for VAT purposes, you do not charge UK VAT on digital services. However, Jersey VAT on services, known as Goods and Services Tax (GST), applies to most digital services.
If your total sales of digital services to Jersey consumers exceed £300,000 per year, you must register for Jersey GST and charge 5% GST on these sales. If you stay below this threshold, you don’t need to register or charge GST.
For B2B digital services (selling to Jersey-based businesses), VAT/GST usually does not apply, as the Jersey business accounts for it under the reverse charge mechanism.
What We Think
Many small businesses get caught off guard when selling to Jersey because it doesn’t follow UK VAT rules. It’s easy to assume that VAT works the same way everywhere, but that’s not the case.
One common mistake is charging UK VAT when you don’t need to, which can make your prices higher than they should be. On the other hand, some businesses forget about Jersey’s GST rules, especially for digital services, which could lead to compliance issues later.
Another challenge is keeping customers informed. Even if you don’t charge VAT, your customers in Jersey may still have to pay GST when their order arrives. If they aren’t expecting this extra cost, it could lead to frustration or lost sales.
How JAFA Can Help
Understanding VAT rules for Jersey can be confusing, but JAFA makes it simple.
✅ No more VAT mistakes - We ensure you’re charging the right tax rates and avoiding unnecessary VAT on Jersey sales.
✅ Stay on top of Jersey GST - If your digital services require GST registration, JAFA helps you figure out when and how to do it.
✅ Keep clear records with AI-powered bookkeeping - Our system tracks zero-rated exports and maintains accurate documentation, so you don’t have to worry about compliance.
✅ Make things easy for your customers - We help you understand GST’s impact on your pricing and communicate it clearly to customers to avoid surprises.
Contact our expert accountants based in Birmingham, UK, either by booking a FREE discovery call or calling us on +44 121 227 6277.
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