Typical HMRC Export Evidence Assessment Process

Centurion assists Exporters to comply with their obligations regarding export zero rating by providing consultancy advice on specific transactions or supply chains or by reviewing export zero rating practices more generally.

Unfortunately, on a fairly regular basis this work also includes referrals to assist UK exporters who have found themselves on the receiving end of a difficult and potentially very costly HMRC VAT inspection. We thought it would be useful to set out below what typically might happen on these inspections and how the Centurion team is able to help.    

Typical HMRC Export Evidence Assessment Process

• On a “routine” VAT inspection HMRC selects a sample of zero rated export sales and requests to see the related documentary evidence of export   
• On the day they also seek a meeting with the Transport department or whoever’s job it is to understand HMRC’s rules on export zero rating, to evaluate their knowledge and to identify any risks or weaknesses
• On the day of the inspection for 10% of sales within the small sample selected by HMRC proof of export is not located by the business and so cannot be presented to HMRC.
• Following the visit HMRC writes to the business to advise it that it intends issuing a VAT assessment for 10% of all zero-rated sales during the last four years, the amount to attract an interest charge and possibly also a financial penalty.
• HMRC also require that the proof of export that was missing at their inspection is produced at a return visit and advise that if it is produced the proposed VAT assessment may be reversible on a future VAT return. Interest and penalties are not to be cancelled.     

Understandably this sequence of events, which we see with increasing regularity, causes financial stress to the affected business, concern about how to manage the situation with HMRC and a need to ensure that any problems with zero rating and especially proof of export are put right going forward. Resolving the perceived issues usually takes a lot of management and staff time too.

Proactive reviews in advance of any HMRC visit will significantly reduce the risk of financial costs and lost management time. However, if issues do arise at a “routine” VAT inspection Centurion can help in numerous ways;

• We can attend and represent the business on any subsequent HMRC visits
• Review what has happened during the VAT visit and the proposed follow-up action to ensure that it is both appropriate and proportionate
• Correspond with HMRC on the business’ behalf
• Manage and help minimise the financial impact on the business, including advising on any proposed penalty action
• Advise on procedures going forward, including providing staff training if required
• Review compliance more generally to help ensure against other problems with HMRC   

Centurion VAT offer an independent and expert source for VAT advice. Based in Wales we work across the UK and have overseas clients who need VAT advice and support when setting up in the UK. VAT advice for organisations who find themselves at an unfortunate juncture with UK VAT for whatever reason, is where we help out. VAT sensitive sectors such as Universities, Further Education Colleges, Housing Associations, Charities and Corporate businesses where VAT can be a real cost are where we specialise. Exporters under challenge from HMRC on Export Evidence; a Property development where VAT Exempt activities are complex; a Local Authority or a Leisure or Cultural Trust – whatever your sector, when you need to get expert VAT advice Centurion is where you’ll find it. 

An award winning VAT team is what you’ll find at Centurion – evidence of the quality of our VAT advice and service can be showed by our long term retention of clients. Whatever your VAT issue – BREXIT, Making VAT Digital, Partial Exemption or Property then do make contact, with a call or email emailus@centurionvat.com