VAT relief for exports – a cautionary tale
Jonathan Main · Posted on: August 6th 2025 · read
Who should read this?
If you export goods from the UK, read on.
This insight provides details of a recent decision in the Upper Tribunal (“UT”). The taxpayer failed in its attempt to overturn a VAT assessment for over £1m, which was raised by HMRC because the taxpayer did not produce sufficient evidence for HMRC to support its exports of goods from the UK. The UT decision did not allege that the goods had not left the UK, merely that the taxpayer was unable to produce the required documentation to support its claim for zero-rating of the sales to its customers.
"This decision is an important reminder to obtain the right documentation and at the right time, to support the export of goods and retain that evidence to deal with an inspection from HMRC."
The decision
The case reference is H Ripley & Co Ltd v Revenue and Customs Commissioners, [2025] UKUT 210 (TCC). This was an appeal from the First-tier Tribunal (“FtT”). The taxpayer sought to overturn the decision of the FtT, which was in favour of HMRC.
H Ripley & Co Ltd (“Ripley”) exported scrap metal to customers in the EU. Sales were ex-works (“EXW”), an incoterm which indicates that the customer is responsible for the export paperwork for removal of goods from the UK, the shipment, and insurance of the goods to their destination. Ripley’s obligations ceased once the goods left its premises.
The Ripley decision highlights three key points, which should be borne in mind by all exporters:
UK VAT legislation imposes strict requirements on exporters to demonstrate that they hold sufficient evidence of removal of the goods from the UK. The UT expressed this requirement as follows, “the correct question is whether the Appellant held sufficient evidence of removal, not whether the goods were in fact removed.” If an exporter holds the required evidence of removal and it later transpires that the customer did not export the goods, this will protect the exporter from further action by HMRC.
The evidence of removal must be obtained within statutory time limits, typically within three months of sale. If the evidence is not held by the exporter, the sale cannot be zero-rated. If evidence is obtained later, the exporter can obtain a credit for the VAT on a later VAT return.
3. Ripley produced the following documentation for the court:
- Bank statements showing payment from its Belgian customer.
- Sales invoices issued to the Belgian customer with a Belgian VAT registration.
- Weighbridge tickets showing that the scrap metal had left Ripley’s premises, confirming that the customer was based in Belgium.
- International Consignment Notes (CMRs), showing an intention to export.
- Commercial documentation only used for cross-border shipments of waste.
- Boarding cards for ferry transportation.
- Emails and WhatsApp messages with the Belgian customer.
- Consistency in the weights of shipments between the above documents, which would indicate they related to the same consignments.
For the following reasons, the court held that the above documents failed to demonstrate the removal of goods from the UK.
- The bank statements and sales invoices confirmed the identity of the customer, not that the goods had left the UK.
- The weighbridge tickets confirmed the removal of scrap from the supplier’s premises, not the removal of goods from the UK.
- The CMRs and commercial documentation were not fully completed.
- The boarding cards did not have any identifying features which matched any of the consignments.
- The emails and WhatsApp messages simply confirmed the existence of an order being placed by the Belgian customer.
- As shipments were routinely similar weights, this did not assist in identifying a specific removal of goods from the UK.
The court summarised its rejection of this evidence in the following terms, “even it could be said the evidence was not inconsistent with removal, it was also the case that it was not inconsistent with the goods remaining in the UK.”
What should I do?
The court did not suggest any wrongdoing by Ripley or that the goods had not left the UK. Ripley simply did not have evidence of removal. The evidence of removal would be:
Removal of identifiable goods from the supplier’s premises.
Carriage of those goods across the UK border.
Arrival of those goods at the customer’s premises outside the UK.
This evidence must be held by the exporter within three months of supply.
There will be an added complication if goods are supplied on EXW terms, as the supplier will not be responsible for the removal of goods or the completion of export paperwork. In these cases, it may be prudent to charge VAT and agree to issue a credit note once the customer provides evidence of removal.
