The First-tier Tribunal has allowed an appeal against HMRC’s decision to deny zero-rating on certain exports to America (Pavan Trading Ltd v HMRC [2023] UKFTT 79 (TC)).
The appellant ran a wholesale business supplying derma fillers, beauty products and orthopaedic products. HMRC denied the zero-rating on the export of these goods to America and raised assessments arguing that the company failed to provide “evidence of export” or provide it within the three-month time limit. The company appealed against the assessments.
HMRC’s main argument was that the company had failed to supply the relevant documentation to them within the three-month limit. However, the tribunal agreed that HMRC had misread VAT Notice 703, para. 3.5 (which has the force of law). The three-month deadline established the time limit for the exporter to obtain the necessary documentation for the exporter’s own records, not the deadline for providing this information to HMRC. The company had clearly met this obligation.
HMRC had also argued that there were certain flaws and contradictions in the evidence presented (although they conceded at the hearing that if the documentation the appellant possessed had been provided to them within the disputed three-month period they would have allowed the zero-rating). The tribunal considered HMRC v Arkeley Ltd (in Liquidation) [2013] UKUT 393 (TC), which established that there was no prescribed form for the necessary documentation:
“the required evidence … may be provided from a number of sources. The evidence may be official … or it may be commercial or supporting … all the documentation obtained within the relevant time limit, including supporting documentation, should be considered in determining whether, taken as a whole, those matters have been so identified”.
The tribunal considered the documentation provided by the appellant and rejected HMRC’s arguments stating “if there was ever a counsel of perfection for the provision of export documentation, then this appellant has achieved it.”
The tribunal concluded that “we have absolutely no hesitation in allowing this appeal”.
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08712.html
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