Assurance procedures: The assurance intervention
At the start of your intervention you need to establish some basic information about the trader’s export and removal business. This will help you to identify any areas of weakness or risk that you should address during the course of your intervention. Establishing the following will be beneficial:
- The volume and value of exports and removals - this will give you an idea of the number of transactions you will need to check. For example you will be able to check a higher percentage of total transactions if they are of high value and relatively few than if there are thousands of small transactions per month. An MSS check prior to the visit would assist greatly with the checking of exports.
- (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- Whether the trader understands the difference between exports and removals and that there are different conditions for zero rating. This is particularly relevant as the EU has been significantly enlarged since 2004, and traders might not be aware that the requirements for trading with certain countries has changed as a result.
- Whether exports and removals are direct (the supplying trader being responsible for arranging the export or removal of the goods) or indirect (the arrangements are made by the customer). This has an important bearing on evidential requirements.
- Who is responsible for ensuring that the requirements and conditions are being met? In many cases lack of communication within a business can create difficulties and misunderstandings. For example, during an initial interview on a visit a Financial Director will assure you that all the export and removal requirements are understood and applied by his company but further checks reveal that this is not the reality.
- Whether the trader also imports and is involved with other departmental regimes such as Inward Processing Relief (IPR - which is dealt with by your International Trade colleagues). Any problems that you encounter with VAT export and removal requirements may have a “knock on“ effect on other regimes and you should liase accordingly.
It is essential that you understand what the trader is doing with his export and removal business before you consider what checks you carry out.