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Was the input tax on a lease to an associated company recoverable?

By Andrew Needham, March 2023

This was an appeal by the appellant against HMRC’s decision to disallow the zero-rating of exports based on the grounds that they did not hold sufficient export evidence. 

The appellant undertook wholesale exports of medical products to the USA and exported the goods through a post office that it also operated. They were sent to distribution hubs for onward supply by the appellant’s customers in the USA. The appellant was required to obtain US certification of the products, which was cross-referenced on the outside of the packets. For each export package, the appellant obtained a form CP72 and a certificate of postage. 

HMRC visited the appellant’s premises to discuss the appellant’s wholesale business, and to inspect the appellant’s VAT records. The appellant sent to HMRC five sales documents relating to exports in September 2018. 

HMRC sent an email to the appellant querying the exports. HMRC was

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