Proving that goods have been shipped to Ireland

The taxpayer sold 29 items of plant and machinery – mainly JCB excavators – to two linked customers based in Ireland. As the customers were supposedly VAT registered in Ireland and the goods were shipped to Ireland they were treated as zero-rated sales by the appellant. The sales were made in 16 different shipments covering 20 sales invoices.

HMRC challenged the zero rating on the basis that the taxpayer had not provided adequate proof that the goods had been shipped to Ireland. There were no bills of lading or evidence of the route taken to ship the JCBs to Ireland. There were several invoicing discrepancies and some of the goods appeared to have been resold in Northern Ireland at a future date ie had never left the UK.

HMRC’s published guidance makes it clear that exporters must take extra caution if a customer ‘is not previously...