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My client buys and sells furniture and recently had a VAT visit from HMRC which resulted in an assessment of £80 000 being raised in relation to a lack of evidence to support the zero rating of export sales to Saudi Arabia over the past three years. An interest charge of £2 100 was also levied.
In effect the officer treated the sales as being standard rated and sold in the UK assessing output tax based on one-sixth of the selling price.
The client assures me that he now has the proper evidence from the shipping agent for all of these sales and has asked me to include £82 100 on the next VAT return to in effect cancel the assessment. He says this action is justified by VAT Notice 703 para 11.3 about belatedly obtaining export evidence but...
