Evidence of Shipment

“Evidence of export consists of two types, official and commercial. For VAT purposes there is no mandatory requirement to retain official evidence of export so equal emphasis should be placed on the acceptance of either official or commercial evidence to substantiate zero-rating. The official and commercial transport evidence must be supported by other supplementary documentation associated with the supply, such as the customer’s order, inter-company correspondence, despatch note, acknowledgement of receipt, evidence of payment, etc.” Full details on the supplementary evidence required are in Notice 703 Export of goods from the United Kingdom. Taken together, the transport and supplementary evidence must show that a transaction has taken place and the goods have actually left the Community. Official evidence is normally: A Goods Departed Message (GDM) where the goods are exported directly out of the UK to a third country destination - see VEXP40400. The GDM is generated by the National Export System (NES) when electronic export declarations are processed. The GDM is only acceptable as export evidence when the Input Customs Status (ICS) code = 60 and the Status of Entry is coded = 8). A certified Export Administrative Document (EAD) also known as the Single Administrative Document (SAD) (Form C88) Copy 3, or NES declaration (as you describe). These must show an official Customs stamp from the office of exit from the EC where the goods exit the EC from another member State. In this case the GDM will show an ICS code = 61 and is not acceptable as official evidence of export unless supported by the stamped copy 3 SAD. Confirmation from the New Community Transit System (NCTS) that the Community/Common Transit (CT) procedure has been discharged. In addition, where an exporter subscribes to the MSS Data to the Trade Service, an MSS report showing ICS code 60 and Status of entry (SOE) code 8 is acceptable official evidence of export. Commercial evidence comprises two types: Primary (eg Master air waybills) Secondary (eg authenticated house air or sea waybills). Along with these transport documents you will also have to provide your own commercial documentation, including payment details, as a basket of evidence.  Ensure the transport documents show clear details of how the goods moved along with the endorsement that they have flown or been shipped.  This is a problem with FPOs because the consignment notes are not acceptable as commercial evidence. HMRC advise that Audit Officers will accept the FPO Global Certificate of Shipment and Air Waybill for VAT zero rating purposes. Also, it is advisable to obtain and retain the Proof of Export (POD) showing the date and signature the goods were received by the customer.

Freight companies and Customs Compliance

Though I know this doesn't apply to all freight forwarders and clearing agents but why are so many still getting import declarations and export declarations to customs wrong - even when they have been given clear instructions. What can we do about it? HM Revenue & Customs and the Export Control Organisation expect exporters and importers to control their freight companies - you given them written instructions with key information: EORI (VAT Number), Customs Procedure Code (CPC), commodity code (tariff number), export licence number, customs authorisation numbers, eg for IPR, OPR, Warehousing, etc. The import or export customs declaration comes back from the freight forwarder (if you are lucky) and one or most of the details are wrong. Perhaps with the increase in AEO approved companies this problem will fade but it seems that training for both companies exporting from the UK and companies importing into the EU is essential. In the meantime customs compliance takes up a lot of time in our office - instructing, checking, double checking, chasing forms, reporting errors and chasing amendments. Any comments?