Reasonable steps

The taxpayer was a VAT-registered business that sold agricultural equipment.

The issue under appeal concerned supplies to a customer in the Republic of Ireland. The sales were zero rated by the taxpayer on the basis the goods had left the UK and the customer was VAT-registered in Eire.

But F had deregistered from Irish VAT in October 2010 leading to HMRC treat all sales after the date as standard rated.

The Revenue said the taxpayer had not made sufficient checks to ensure the customer was registered and the firm was not entitled to zero rate the supplies. The department raised an assessment for under-declared output tax of £87 158.

The taxpayer appealed.

The First-tier Tribunal believed the company had taken “reasonable steps” to ensure the customer was VAT-registered in Ireland as required by HMRC Notice 725 (paragraph 4.2).

The judge said there was no reason for the...