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VAT Export and Removal of Goods from the UK

HM Revenue & Customs
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Removals of goods to other Member States - evidential requirements: Tribunal decisions: Gurmej Kaur

The subject of proof of payment being used to substantiate the zero-rating of intra-EC supplies of goods was explored in this case, reference MAN/94/1407.

The appellant, a clothing wholesaler, was visited during April 1994 for the purpose of validating a repayment claim. The officer found that sales invoices had been zero-rated as intra-EC supplies but that no evidence of removal was held. It was claimed that these sales had been made to a relative in Germany who had collected the goods and paid in cash.

The appellant’s accountant requested reconsideration of the reduction of the repayment claim and produced a bank giro slip showing the transference of money from Germany to the UK as evidence of removal. He submitted that it was implicit in the invoice and statement that the goods had been removed to Germany. No other evidence was produced to support this claim. The appellant argued that production of any one of the various documents listed in Notice 703 (December 1992 edition) – now in Notice 725 -constituted sufficient evidence of removal of goods from the UK.

The Tribunal rejected this submission stating that Notice 703 contains the conditions requisite for zero-rating made by the Commissioners under the 1985 Regulations [now VAT Regulations 1995]. The notice clearly states that not only must acceptable commercial evidence of removal in the form of any one or more of the documents listed be provided, but so also must clear evidence that the goods in question have been removed from the UK. Neither document produced by the appellant contained any evidence to show the removal of the goods from the UK. In addition, as the customer collected the goods for removal, the requirements of Notice 703 (December 1992 edition) ought to have been satisfied if the goods were to qualify for zero-rating.

The appeal was dismissed.