VATRESNI6350 - Assurance at the retailer: Business purpose
The question of whether the VAT
retail export scheme can be used when exporting for business purposes was
considered in a tribunal case: G K Electrical (UK) Ltd (MAN/87/198). The case was of particular interest for the
courts view of what constitutes business purpose.
This case concerned an assessment raised against a retailer because the retail
export scheme forms held to support zero-rating were unsatisfactory. A number
of retail export scheme forms had not been properly completed, and the
quantities exported were such that we considered many of the consignments to be
by way of business.
The tribunal accepted our view and dismissed the appeal, but it did not get
into the detail of defining quantity limits for personal exports. In reaching
their conclusion the tribunal gave the natural meaning to “business”, although
expressing reservations as to the practicality of the result. The decision
indicated that, to succeed in their appeal, the company needed to prove that
the alleged export sales had been in accordance with the conditions specified
in Notice 704. This they
had not done, the Chairman concluding “that the burden lies on the appellant of convincing us
on a balance of probabilities that the Commissioners assessment is wrong.
It has failed.”