Post-Brexit VAT Divergence and why the EU Forgives and the UK Doesn’t?
In H Ripley & Co Ltd v HMRC, the Upper Tribunal recently confirmed a strict UK rule: zero rating exports requires that the supplier holds sufficient proof of export, and that documentation must be obtained within three months. Even if the goods actually left the UK, incomplete, missing or delayed documentation can cost you the zero rating.
By contrast, in the ECJ Case C-602/24 (W.), the Court held that a supplier could still benefit from zero rating even though it didn’t possess full formal documental proof of removal, when other evidence (e.g. customs export documentation) established the goods were in fact exported.
Key Differences
| Issue | UK / H Ripley | EU / C-602/24 W. |
|---|---|---|
| Burden of holding documentary proof | Rigid — supplier must hold all required evidence before the deadline | More flexible — absence of some formal proof does not automatically deny relief |
| Treatment of gaps in documentation | Gaps or inconsistencies may lead to denial of zero rating | If substantive evidence shows an export, relief may still apply |
| Emphasis | Form and completeness | Substance and overall export reality |
| Time limits | Strict 3-month documentary window | Less rigid if the essential evidence exists |
What This Means for Exporters
- Currently under UK law, missing or mismatched paperwork is a major risk and even real exports can lose zero-rating if not complied with.
- In the EU, courts remain more willing to accept imperfect documentation, so long as the export is clear in substance.
- For businesses operating cross-border, one set of documentation might pass in the EU but fail under UK scrutiny. To protect zero rating, exporters must ensure they collect all required documents, verify their completeness and consistency, and ensure to gather these as soon as possible or at least within HMRC’s strict 3-month deadline!