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Our client is a limited company. It had a VAT inspection in April 2008 and the VAT officer alleged that sales which had previously been described as zero-rated exports had not met the necessary conditions and should be standard rated.
The VAT assessment of £40 000 was paid by the company which then managed to recover the full amount from the party arranging the exports who accepted responsibility for errors in paperwork.
We appealed against the assessment and after quoting from HMRC’s Notice 703 the department agreed that we were correct and the £40 000 was refunded to the company in February 2009.
The export agent subsequently requested the refund of the £40 000 he had previously paid to the company.
However our client had incurred costs and refused. In September 2009 he agreed to refund £8 000 to the agent ‘in full and...
