Check VAT

A UK VAT registered trader made two sales of electronic goods to B a Gibraltar registered company. B requested that the goods be delivered to Belgium where it had its main place of business. B was not registered in Belgium although it should have been. However the taxpayer believed that because B was incorporated in Belgium it could zero rate supplies to it as exports. Thus it claimed a net repayment for the input tax paid in the UK on the goods.

HMRC refused the claim on the grounds that the UK supplier should under Article 28 of the Sixth Directive have obtained the customer's VAT registration number on its VAT sales invoice. This condition was contained in para 3.1 of Notice 725 VAT. The VAT tribunal upheld HMRC's decision so the taxpayer appealed.

The High Court judge said that the supplier was...