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HMRC internal manual

VAT Export and Removal of Goods from the UK

National Export System (NES) and New Computerised Transit System (NCTS): Evidence of export available under NES

The system, based on electronic rather than paper-based information, has an impact on the evidence of export produced. Every time something happens to the export entry a new version is created.

As a bare minimum an export should have at least 3 versions. There will be

  • a pre-lodgement version, which shows that an export declaration has been made and that the goods are on the way to the port or airport
  • a cleared version, which shows that goods have been cleared by Customs for export
  • a departed version, which shows that the goods have left the EU or are assumed to have left the EU.

An audit officer who asks for all versions of an export entry will be able to chart the progress of the goods by looking at the Input Customs Status (ICS) codes

  • ICS code 60 confirms that the goods have actually been shipped direct to a country outside the EU and that a departure message has been generated. In this instance the electronic evidence of shipment is sufficient as proof of export.
  • If the goods transit the EU then they will receive an ICS code 61. In these circumstances the system only assumes that the goods have left the territory of the EU. The evidence of physical export will usually either be copy 3 of the paper SAD (C88) stamped at the point of exit from the EU, or commercial evidence of export as described in Notice 703 Export of goods from the United Kingdom.
  • ICS code 61 is also used when a departure message is not input to CHIEF and the system again assumes departure. To free up the system the auto departure kicks in 15 days after the Permission to Progress has been given.

A goods departed version of the export entry with an ICS code 61 is not satisfactory evidence of export for VAT zero rating purposes.

Remember though, the trader is under no obligation to retain official evidence of export to support VAT zero rating. The option remains to retain commercial transport evidence to prove that the goods have been exported.