beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Export Procedures

Pre-shipment control: VAT accounting for exports

National Export System provides authorised operators with an electronic means of producing official evidence of export to support VAT zero rating. NES makes it easier for authorised operators to comply with VAT requirements and for us to both assure the activities of legitimate trade and detect deliberate fraud. This also applies to exports delivered under indirect ex- works price sales arrangements.

The time limit for direct and indirect (ex- works) exports or removals and supplies of goods involved in groupage or consolidation prior to export or removal is 3 months.

For supplies of goods involved in processing or incorporation prior to export or removal the time limit is 6 months.

Evidence of export or removal

Information held must prove that goods have been physically exported or removed, not just that a sale has taken place. Proof must consist of either a Form C88) or any commercial documentation. In both cases the evidence should be supported by other documentation associated with the supply as described in VAT Notice 703 Exports and removals of goods from the United Kingdom in paragraph 6.2 and 6.3.

Once the Departure message has been accepted by CHIEF, CHIEF will send copies of the Movement Departure Advice (S8) to the persons who input the declaration - Submitting Trader. In addition the status of the entry in CHIEF will change to SOE 8.

VAT: Pre shipment checks

The objective of VAT and export freight control procedures, including those for Merchandise in Baggage (MiB) (see EXPP8010) is to ensure that the:

  • export transactions are made in good faith
  • goods exist and have been formally presented to Customs
  • description, quantities and values shown on the commercial and official documents are correct
  • Commissioner’s legal conditions have been fully met, and
  • goods are exported from the EU within the specified time limits.

To achieve this objective it is necessary to confirm when the exporter actually exports, the description and value of goods, and their ultimate destination. Full pre shipment declarations require this information but under the low value and non statistical procedures outside of NES, the exporter’s name, the ultimate destination and the value of the goods are sometimes not shown on the simplified pre shipment advice.

Insistence on correctly completed export documentation could help to stop a fraudulent export taking place.

VAT: Selection, examination and verification

Selection of consignments of goods for examination is normally based on known risks.

Experience has shown that the following procedures are particularly effective when examining exports for VAT risk:

  • vetting load lists, manifests, early reception lists and airline inventories to identify suspect items
  • scrutinising full manual Form C88 and commercial documents used for Low Value or non stat exports under normal procedures and any supporting export documentation
  • making selective examinations of suspect consignments
  • carrying out occasional export verification checks advised on suspect items selected and advised by VAT control officers. This may on occasion involve examination of both official and shipping line or airline records.

VAT: Identification of risks

The following export risks have been identified:

  • substitution of documents when a consignment has been selected for examination (the Code Article 65 should prevent this happening)
  • goods obviously mis-described or poorly described under general headings such as ‘parts’ or ‘household effects’ are not acceptable
  • goods apparently over valued (to cover short shipment - correct value for the smaller quantity shown on invoice. The remaining goods are diverted for off record sales)
  • goods apparently over valued (to obtain export evidence for greater quantities to cover diversion of other goods for off record sales)
  • weight inconsistent with declared quantities
  • layout - have convenient gaps been left on the documentation to allow later manipulation?
  • details omitted from pre shipment documentation eg exporter’s name or country of destination, and
  • freight forwarders showing themselves as the exporter on export documentation.

Note: A freight forwarder can only be shown in Box 2 of the C88 as the exporter when the export takes place under groupage arrangements, and provided each individual exporter’s VAT number is shown in Box 44 on the continuation sheet.


Information held must identify the date and route of the movement and the mode of transport involved. This information must include:

  • date of departure of goods from the supplier
  • customer’s name, VAT number, a description of the goods and an invoice number
  • registration number of the vehicle collecting the goods and the name and signature of the driver
  • delivery address for the goods
  • name and address for consolidation, groupage, or processing (if applicable)
  • route, for example - Channel Tunnel, port of exit
  • name of ferry or shipping company and date of sailing (if applicable) and
  • airway bill number and airport (if applicable).

The information held should also include:

  • trailer number (if applicable)
  • full container number (if applicable)
  • name and address of the haulier collecting the goods.