If you are UK Value Added Tax (VAT) registered and export from the UK, you are ordinarily entitled to claim VAT relief on your exports, that is, they are ‘zero-rated’ for VAT output tax purposes, but importantly, only if you are able to provide records acceptable to His Majesty’s Revenue & Customs (HMRC) which sufficiently evinces that export has taken place.

In a 2025 tax tribunal case H. Ripley & Co. Ltd. v HMRC pdf an exporter had appealed against an earlier unfavourable decision on their zero rating of their UK exports to the European Union (EU), made by a lower tribunal. The exporter had sought to rely on inconclusive evidence - none of which was regarded as being acceptable by HMRC in its guidance (VAT Notice 725) - to retrospectively claim export VAT relief outside the permitted time period (usually 3-months, with limited exceptions).

The appeal was dismissed on the basis that the appellant had failed to demonstrate that the conditions for VAT zero rating at export had been satisfied. In that no valid evidence falling within the requirements of HMRC guidance had been produced within the required time period, to show that the goods had definitely been removed from the UK. The tribunal found that if a trader does not have the necessary evidence within the time period allowed, VAT must be accounted for in the normal way, and any adjustment must be made later, with interest payable for the intervening period.

Where an exporter is involved in an 'ex works' (EXW) contract, under which the goods are collected by their customer, exporters must ensure through their contractual arrangements with their customers that the goods are properly exported. This is especially the case for those which are Authorised Economic Operator (AEO) accredited, for which errors made by EXW customers may be counted against the AEO exporter's compliance record.

Of particular note is that where a CMR (Convention de Marchandises par Route - Convention on the Contract for the International Carriage of Goods by Road) transport document is sought to be relied on as evidence of UK removal for export VAT zero rating purposes, as in this case, only a legible copy of the fully completed document (by the consignor / sender, the carrier, and the consignee) that is, as signed-off on at destination by the consignee / recipient, is deemed to be acceptable evidence by HMRC.

VAT is a tax on goods and services consumed in the UK. So, when goods are exported and therefore consumed outside the UK they are VAT zero-rated, provided certain conditions are met (see VAT Notice 703). In general, goods must be physically exported and evidence of this obtained, within three months of their supply / sale. The evidence of goods removal from the UK for retention can be official or commercial. If the commercial evidence available is deemed to be insufficient in the required details, official evidence will be referred to. Regardless of which type of evidence is on record, additional supplementary information must also be available to show that a transaction took place and that it relates to goods demonstrably physically exported. Otherwise, if records are unsatisfactory, VAT zero rating will not be permitted, and the exporter will be liable to account for the VAT that becomes due.

The official evidence / proof of export acceptable to HMRC for VAT zero rating purposes is the fully completed customs cleared export entry declaration (full entry print or goods departure message). Acceptable commercial evidence is generally the fully completed transport document of international carriage covering the consignment (for example, international road freight’s CMR, see above). The supplementary supporting records required are those evidencing the transaction and linking it to the physical removal of the relevant goods from the UK for example, the sales contract, copy sales invoices, the packing list, bank statements showing payments made for the goods by the customer, evidence of receipt of the goods abroad, and similar (see VAT Notice 703).

Any evidence of proof of export (official, commercial or supplementary) relied on by the exporter for VAT zero rating purposes must clearly identify the supplier (and consignor, if different); the customer (and consignee, if different); and provide: an accurate and full description of the goods, including quantities; an accurate and consistent value of the goods; the export destination; and the transport mode and routing of the goods movement.

Where goods are exported under an ex. works (EXW) contract the standard of evidence required by HMRC for VAT zero rating purposes is high, to match the risk. Contractual arrangements between buyer and seller should confirm the provision of proof of export by the buyer to the seller acceptable to HMRC (for example, a copy of the cleared customs declaration) per consignment. In the case of such movements, copies of the transport documents alone will not suffice as evidence. The information held must include the following:

• A written customer order with their name and address (and the delivery address).

• Copy sales invoice showing the invoice number, the customer’s name and a clear description of the goods, including quantities.

• The date of departure of goods from the exporter’s premises and from the UK.

• The Name and address of the haulier collecting the goods, registration number of the vehicle collecting the goods and the name and signature of the driver.

• Where the goods are to be taken out of the UK by an alternative haulier or vehicle, the name and address of that haulier, the registration number of the vehicle and a signature for the goods.

• The date and route of the consignment’s movement for example, Channel Tunnel or  (air)port of the exit.

• The mode of transport and trailer number, full container number etc. as applicable.

• The name and address for consolidation, groupage or processing if applicable.

• Name of ferry (copy of travel tickets) or shipping company and date of sailing or airway bill number and airport, as applicable.

Any records evidencing proof of export for VAT zero rating purposes must be kept for six years and be readily available to a visiting HMRC VAT officer. If satisfactory evidence has not been obtained and retained within the relevant time frames then the goods concerned become liable to VAT at the applicable UK rate.

It is recommended that exporters review their customs and international trade processes and procedures, involving their business partners as necessary, to ensure that HMRC’s expectations in substantiating proof of export for VAT relief purposes are being met. Source: UK Upper Tribunal (Tax and Chancery) and HMRC Guidance (GOV.UK).