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HMRC internal manual

VAT Export and Removal of Goods from the UK

From
HM Revenue & Customs
Updated
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Assurance procedures: Penalties and interest implications

While Misdeclaration Penalties (if applicable) can be mitigated if, for example, the trader is generally compliant and all the missing evidence is obtained in the VAT period following the issue of the assessment, default interest (DI) is not. The Musashi Court of Appeal ruling - see VEXP90800 - has established that DI is applicable to assessments raised for failure to comply with the conditions of zero-rating exports and removals. Further, this DI cannot be reclaimed even if the evidence is obtained at a later date.