VEXP30400 - Conditions for zero rating: Evidence of export
Source: gov.uk (2025-03-17)


Zero rating is conditional on there being acceptable evidence of export, which can be either official or commercial. For VAT purposes it is not mandatory to retain official evidence of export, therefore you can accept commercial evidence to substantiate zero rating.

The official and commercial transport evidence must be supported by documentation proving that a supply has taken place, such as the customer’s order, inter-company correspondence, despatch note, acknowledgement of receipt, evidence of payment, etc. Full details on the evidence required are in Notice 703 “Export of goods from the United Kingdom”. Taken together, the evidence of export and supply must show that:
- a transaction has taken place; and
- the goods have actually left the UK.
Official evidence

Official evidence is normally:
- A declaration on the Customs Declaration Service (CDS). Please see VEXP40200 which contains a link to CDS guidance on Gov.UK
- Confirmation from the New Community Transit System (NCTS) that the Community/Common Transit (CT) procedure has been discharged - see VEXP40500 (https://www.gov.uk/hmrc-internal-manuals/vat-exports-of-goods-from-the-uk/vexp40500).
See Notice 703 (http://www.gov.uk/government/publications/vat-notice-703-export-of-goods-from-the-uk) for further guidance concerning acceptable evidence.

Commercial evidence

Commercial evidence comprises two types – primary (eg Master air waybills) and secondary (eg authenticated house air or sea waybills).Notice 703 (http://www.gov.uk/government/publications/vat-notice-703-export-of-goods-from-the-uk) includes details of acceptable commercial evidence. The Assurance procedures in VEXP110000 (https://www.gov.uk/hmrc-internal-manuals/vat-exports-of-goods-from-the-uk/vexp) provides guidance on the checks which should be carried out on the evidence produced.

Unsatisfactory or suspect evidence of export relied on in good faith

The Court of Justice of the European Union (CJEU) judgment in Teleos PLC [C-409/04] established that, in certain limited circumstances, a business retains the right to zero rate a supply even if evidence he has relied on in good faith turns out to be unsatisfactory. Although Teleos concerned an EU removal, the general principles read across to exports. The limited circumstances are:
- at first sight the evidence relied on in good faith is consistent with the requirements set out in Notice 703 (http://www.gov.uk/government/publications/vat-notice-703-export-of-goods-from-the-uk); and
- we accept that the business has taken every reasonable measure to ensure that his supply did not lead to his participation in evasion.
Vague assertions by a business that he acted in good faith are not sufficient to retain the right to zero rate. There is more information about the impact of the Teleos ruling at VEXP70400 (https://www.gov.uk/hmrc-internal-manuals/vat-exports-of-goods-from-the-uk/vexp70400).

Electronic Evidence

Businesses may hold electronic documents as evidence of export or removal of goods and this will be considered satisfactory provided:
- the electronic information shows that the goods left the UK (or EU in the case of Northern Ireland goods exported via the EU);
- the electronic evidence is readily available to officers for inspection (see section 6 Notice 700/63 (http://www.gov.uk/government/publications/vat-notice-70063-electronic-invoicing/vat-notice-70063-electronic-invoicing)); and
- the business satisfies the conditions for electronic storage in section 5 Notice 700/63. (http://www.gov.uk/government/publications/vat-notice-70063-electronic-invoicing/vat-notice-70063-electronic-invoicing)
Evidence cannot be said to be unsatisfactory because of the format of storage.

Meaning of “hold satisfactory evidence”

In this context, the term “hold” must be taken to be the time that the document came into existence and not when it was printed and in tangible form.

Contact the VAT, Export & Removals UoE (VEXP10600 (https://www.gov.uk/hmrc-internal-manuals/vat-exports-of-goods-from-the-uk/vexp10600)) if you encounter electronic evidence and need advice.