VAT Consultant
Share this content
Pound coins
Les Howard
Pound Coins

Evidence of removal - again!

6th Jan 2017
VAT Consultant
Share this content

This is a perennial issue, which causes trouble for some taxpayers. Goods sold to another taxable person in another Member State are zero rated subject to meeting certain conditions. VAT Regulation 134 provides the legal basis of this.

The latest FTT case that I have seen is Angela McCamley, a tyre wholesaler, based in County Down. She maintained ‘no documentary evidence’ for the removal of goods to the Republic of Ireland. Following repeated failure to provide evidence, HMRC issued a formal Sch 36 Notice to produce the evidence. The taxpayer still failed to do this; she also failed to submit EC Sales Lists.

In response to the HMRC case, the taxpayer’s representative tried to move the responsibility to HMRC to confirm the status of the taxpayer’s customers. He also argued that Notice 725 (which contains HMRC’s interpretation of Reg 134) only had the force of law when brought to the attention of the taxable person!! It was also, he argued, a breach of the taxpayer’s Human Rights to assess for VAT solely due to a failure to fulfil the removal conditions established by law!

HMRC’s response was suitably robust: “The Appellant’s submission that the Tribunal should disregard legislative requirements on the taxpayer and rely on HMRC to carry out verification checks in other member states [is] without foundation or merit, being completely contrary to the clear words of the legislation. … The onus is on the taxable person to comply with legislative requirements and keep valid commercial evidence of the removal of goods from the UK in order to be able to rely on the zero-rating provisions in section 30 VAT Act 1994.”

As expected the Tribunal decided against the taxpayer. The case raises no new point but it is a clear reminder that a person involved in cross border trade must make themselves aware of the regulations, and ensure that proper documentary evidence is routinely obtained.

The decision is here:

Replies (0)

Please login or register to join the discussion.

There are currently no replies, be the first to post a reply.