Exporter entitled to zero rate goods

The taxpayer sold goods to reward programme operators (RPOs) but arranged for the delivery of the goods to be made directly to the reward recipients (RRs) of the scheme. The RRs could be based inside or outside the UK. When they were outside the UK the taxpayer zero-rated its sales invoices to the RPOs as an export of goods which were zero rated. HMRC claimed that the supply of goods to the RPOs happened before they left the UK and were therefore standard rated.

The First-tier Tribunal reviewed the commercial contracts between the RPOs and the taxpayer. It decided that the taxpayer was responsible for the delivery of the goods to the RRs and that the RPOs never took physical possession of them. The risks of trade such as goods being lost in transit were all taken by the taxpayer which liaised with the couriers to ensure...