Procurement International Limited v The Commissioners for HMRC
[2024] UKFTT 949 (TC)
H Ripley & Co Limited v The Commissioners for HMRC
7 February 2024
[2024] UKFTT 125 (TC)
First-tier Tribunal
A company tried to get back VAT on scrap metal exports to Belgium but didn't have the right paperwork proving the scrap left the UK on time. Even though they had lots of documents, they were too late to be useful, so the taxman won.
Key Facts
- •H Ripley & Co Limited (HR) appealed HMRC's denial of zero-rated output tax (£1,176,161.00) for 72 scrap metal supplies (91 loads) to Belgium between February and September 2016.
- •HMRC denied the claim due to insufficient evidence of export under VAT Public Notice 725.
- •HR provided additional evidence, including boarding cards, later than the three-month timeframe specified in VN 725.
- •The Tribunal considered various documents provided by HR: invoices, weighbridge tickets, bank statements, CMRs, Annex VII forms, P&O boarding cards, emails, and WhatsApp messages.
- •The key dispute centered around whether HR held sufficient commercial evidence of export within three months of each supply as required by VN 725.
Legal Principles
The physical movement of goods from one Member State to another is a condition precedent to the application of the exemption under article 138 PVD (and consequently zero-rating in the UK).
Teleos at [37]
Proof of export depends on sufficient evidence of export being in the taxable person's possession at the relevant time. Absent fraud or bad faith, such evidence results in zero-rating even if the goods were not exported.
Teleos and Arkeley
The three-month time limit in VN 725 applies to 'the removal of goods and obtaining valid evidence of removal'.
VN 725 paragraphs 4.3 and 4.4
The burden of proof is on the taxpayer to show they satisfied the conditions to zero-rate supplies and provided documentation showing goods were removed from the UK.
Angela McCamley v HMRC [2016] UKFTT 0701 (TC)
Outcomes
Appeal dismissed.
HR failed to provide sufficient commercial evidence of export within the three-month time limit specified in VN 725. The Tribunal found that none of the documents provided, individually or collectively, met the necessary evidentiary requirements.
Similar Cases
Vanrooyen (Elite Prestige Supercars) Limited v The Commissioners for HMRC
[2023] UKFTT 338 (TC)
Block-Aid Limited v The Commissioners for HMRC
[2024] UKFTT 339 (TC)
Ataf Iqbal Butt v The Commissioners for HMRC
[2024] UKFTT 893 (TC)
Heartlands House Limited v The Commissioners for HMRC
[2023] UKFTT 747 (TC)