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Lack of export evidence for VAT zero rating

When can HMRC assess?

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Exporter claims zero rating for transactions dated in VAT quarter P01/17. He fails to obtain proper export evidence.

HMRC argue that, since he had three months to obtain export evidence, the error occured in his P04/17 Return, and are raising an assessment in this period. Why is the assessment not proper to P01/17?

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By joosepi
21st Aug 2017 10:07

This paperwork trace will lie in the admin of logistic Co. The client should proof copy. And HMRC should grow up.

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Replying to joosepi:
By cormocountry
21st Aug 2017 13:11

joosepi wrote:

This paperwork trace will lie in the admin of logistic Co. The client should proof copy. And HMRC should grow up.

Yes it will, but it is up to the exporter to ensure that the logistic co. sends copy of Bill of Lading or documented proof of export with correct dates to the supplier company. I do this on a regular basis as we scource UK-supplied goods out to a British O/T.
The remark about HMRC 'growing up' ia valid, but I suspect, a forlorn hope.. ( The 'dirty tricks' element puts emphasis on retailers extracting VAT from exporters wherever possible & minimising information to enable VAT zero-rating to occur.) It is no longer possible to send a copy of VAT form 407 (filled in) for the retailer to use as it is only now available to retailers via the Helpline (which as we all know, is managed in a way that prevents you getting through, or any help at all..!)
Many companies in UK are too terrified of HMRC to look into the permitted regulations on exporting & want to charge it anyway. We prefer not to deal with these if at all possible.
One of the troublesome anomalies we have encountered is the quarterly VAT return period .. the permitted three months to supply relevant information.. for the proof of export.
On one of our (vehicle) purchases, which was from a company who was VAT registered, there was no shipping opportunity to export the vehicle for 5 months from agreed purchase date. It was lucky that the seller (in order not to loose the sale) was agreeable to payement being delayed until we were within the three months of sailing period & kept it on his books. HMRC had told him that he should still charge the VAT & that they did not have to return it to us, as we were not UK VAT-registered..!! (However, his accountant & our shippers sorted that out.)
It IS a minefield, & exporters accountants should really be aware of the rules governing this sort of issue.

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By Malcolm McFarlin
21st Aug 2017 10:42

I am aware of several of these cases. HMRC are currently undertaking a 'drive' on exporters. They are correct in raising an assessment for the next quarter. This HMRC exercise seems to me to be all about the 'interest' since their assessment will attract interest, the HMRC figures of 'raising revenue' will look good while the trader quietly adjusts the 'alleged missing export evidence' in their next VAT return. However, we are currently challenging the HMRC decision with a view to taking the matter to the First Tier Tax Tribunal. Clearly it depends upon the amount of the assessment as to whether or not it is worthwhile for a company to appeal the HMRC assessment due to the costs involved.

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