One of our clients sold a high value vehicle on which the customer claimed a £40,000 VAT exemption.
The customer introduced a financial intermediary into the equation and they duly set up a deal with a European Finance House and arranged for the vehicle to be exported. The vehicle was invoiced to said European Finance House and our client was sent photographs of the vehicle bring transported through Calais as proof of export. Everything looked legitimate.
However, some months later, our client becomes the subject of HMRC enquiries and it transpires that the paperwork supplied by the intermediary was not genuine. The European Finance House existed but they say, they have no knowledge of this particular deal.
Our job then is to get £40,000 out of the customer so it can be recorded as a normal sale and our client can avoid any further investigation by HMRC. The customer was obviously not too pleased about this and instructed a large firm of solicitors to play hard ball. However, after some back and forths and threats of court action, the customer paid up and the file was closed. A good result from a case which had the potential to end badly.
The intermediary, we assume, will still be operating and so you may wish to apply extra due diligence when agreeing to complete deals like this or any other VAT exemption scheme.
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