Insufficient evidence

The taxpayer a UK company sold goods to a Spanish business which arranged for the transport of the goods to Spain mostly by way of an independent haulier based in the Republic of Ireland.

The taxpayer treated the goods as zero rated under VATA 1994 s 30(8) and VAT Regulations SI 1995/2518 reg 134 on the basis they were supplied by a taxable person in one member state to another taxable person in another member state and transported from the seller’s member state to that of the purchaser.

HMRC said the conditions for zero rating were not satisfied and issued an assessment to collect the underpaid tax.

The First-tier Tribunal found the Spanish firm did not account for VAT in Spain. The documents relating to the removal of the goods were forgeries and the taxpayer had not carried out sufficient checks...