VAT

The EU-UK Trade and Cooperation Agreement, now in place, means change. It will require adapting to new trading arrangements, rules and regulations. This information for cross-border SMEs in Ireland and Northern Ireland will outline key areas of change in VAT for various trade routes, includes some useful links and a VAT factsheet. 

VAT RULES

The NI Protocol provides that Northern Ireland will be subject to the same EU VAT rules on goods as EU Member States after the transition period.

SERVICES 

The NI Protocol provides that EU VAT rules on services will not apply to Northern Ireland after the transition period.

Vat status

Whilst NI maintains alignment with the EU VAT rules for goods, including goods moving to, from and within NI it will remain part of the UK’s VAT system.

VAT e-commerce

New rules came into force on 1 July 2021. For further information visit  GOV.UK /  EU /  Irish Revenue


Trade Routes 

Choose from the options below to learn more about the supply of goods and services for each trade routes. 

TO AND FROM NORTHERN IRELAND

Supply of Goods

The NI protocol will apply to supplies of goods between NI and the EU (including ROI). From 1 January 2021, the current VAT treatment on the supply of goods, as well as the intra-community supply and acquisition of goods rules, will still apply when moving goods from NI to ROI. EU businesses supplying and moving goods to NI after the transition period will also follow the same intra-community rules that currently apply.

  • NI businesses will be required to complete EC Sales Lists when selling goods to VAT registered customers in the EU and Intrastat declarations (which are subject to the Intrastat threshold for dispatches and arrivals).
  • ROI businesses moving and supplying goods to NI will be required to report details of trade with NI on the Intrastat system (subject to the threshold limits) and VAT Information Exchange System (VIES).
  • Click here for HMRC’s guidance on Intrastat declarations and click here for the Irish Revenue’s guidance on VIES and Intrastat.

There will also be a requirement to put an “XI” prefix in front of your VAT number on your invoices if moving goods from NI to EU and to provide your XI prefix in front of your VAT number when communicating with suppliers moving goods from EU to NI. Click here to check if you are trading under the NI protocol.

September 2021 Update: Changes were introduced in respect of the movement of goods from NI to the EU and imports of low value goods into the EU or NI came into force on 1 July 2021. There is a new opt-in One Stop Shop (“OSS”) quarterly VAT reporting and payment systems for distance selling and an Import One Stop Shop (“IOSS”) monthly VAT reporting and payment systems for imports. This means that businesses which fall into the scope of these new rules are no longer required to VAT register in each of the EU member states of their customers. A business opting to register for OSS is able to do so once in any EU member state or in the UK, provided that it is VAT registered in the EU member state or is trading with the EU under the Northern Ireland Protocol. Click here to check how to register to report and pay VAT on distance sales of goods from NI to the EU. Click here to register. Click here to tell HMRC you’re registered for the VAT IOSS in the EU. The package also introduces new rules for supplies made through online marketplaces, similar to those already applying in GB and partly in NI. Click here to access the policy paper on the EU VAT e-commerce package. To access further information about GB’s existing scheme click here. Click here to access the OSS and IOSS guidance outlined by the Irish Revenue. 

Supply of Services

The NI Protocol will not apply to the supply of services and NI will follow all UK VAT rules relating to services. Most services supplied between NI and the EU should not see significant changes for most sectors in respect of legislation and guidance, however, there may be some changes in terminology and invoice references. Further guidance is expected from the UK and EU on some of these issues.

Significant changes are expected in respect of the place of supply rules in relation to financial services. The UK has proposed to extend the specified supplies order so that relevant financial supplies to EU counterparties (including ROI) will give the right to recovery of associated UK VAT on costs after the transition period ends, although this may depend on the outcome of UK-EU negotiations. However, if this is legislated for in the UK, it is likely that ROI will introduce similar rules for VAT on financial services.

It is also expected that the “use or enjoyment” rules relating to place of supply of services will change in respect of both the UK and the EU . This is assuming the Cross Border Taxation 2018 Act is adopted unchanged. Click here to access current HMRC’s guidance on use and enjoyment rules. The current VAT treatment on other supplies of services between ROI and NI is not expected to change.

  • Click here to access the place of supply rules for services outlined by the Irish Revenue.
  • Click here to access the place of supply of services outlined by the  HMRC’s VAT notice 741a .

Further guidance may be issued by both tax authorities and further changes may arise. 

TO AND FROM NORTHERN IRELAND AND GREAT BRITIAN 

Supply of Goods

The NI Protocol will apply to the supply and movement of goods between NI to GB and GB to NI.

Click here to access HMRC’s policy paper setting out how VAT rules will apply to movement of goods between GB and NI VAT will continue to be accounted for by the supplier as it currently is on goods supplied between NI to GB and GB to NI. 

Registering for VAT, VAT on goods sold between Great Britain and Northern Ireland, VAT on goods sold from Great Britain, transported via Northern Ireland, to an EU member state, If goods are located in Great Britain at the point of sale ,If goods are located in Northern Ireland at the point of sale, VAT on goods sold to Great Britain from an EU member state via Northern Ireland, Businesses moving their own goods from Great Britain to Northern Ireland, Businesses moving their own goods from Northern Ireland to Great Britain. Sales of goods from Great Britain to Northern Ireland, and within Northern Ireland, by members of a UK VAT group, VAT Retail Export Scheme. Personal exports of vehicles from Northern Ireland to Great Britain, Sales of goods on board ferries between Great Britain and Northern Ireland, Adjustments to input VAT on businesses moving their own goods, Intra-EU simplifications. Margin Scheme, Fiscal Warehouses.

VAT will also have to be accounted for when a business moves its own goods from GB to NI, however, a business will not be required to account for VAT on the movement of own goods from NI to GB unless the goods are subject to an onward sale to its customer in GB. 

Exceptions to these rules will apply whereby the customer/importer will account for VAT in its UK VAT returns in certain cases. These include movements of goods between GB and NI declared into a special customs procedure, supplies currently subject to domestic reverse charge rules, or supplies subject to onward supply procedures.  Click here to access HMRC’s current manual on place of supply of goods.

Where goods are sold between members of a UK VAT group, and those goods move from GB to NI, VAT should be accounted for in the same was as a movement of own goods. In order for domestic supplies of goods in NI to be disregarded for VAT purposes when sold between members of a VAT group, both entities must be established, or have a fixed establishment in NI. Where one or both members only have establishments in GB, VAT must be accounted for on the supply.  To get further advice customs requirements on moving goods between Great Britain and Northern Ireland sign up  here for the Trader Support Service .

September 2021 Update: GB businesses that are not VAT registered in the UK but are registered for IOSS are able to report their IOSS number to HMRC prior to moving goods to NI but are not required to charge VAT on these supplies to customers in NI. GB business not registered for IOSS should continue to use the existing VAT treatment or supplies of goods to NI. Online marketplace liability does not apply in relation to Great Britain businesses that make sales of goods to Northern Ireland customers. To access the policy paper on the EU VAT e-commerce package, click here. Further information about the UK’s existing scheme can be found here.

  • NI businesses will be required to complete EC Sales Lists when selling goods to VAT registered customers in the EU and Intrastat declarations (which are subject to the Intrastat threshold for dispatches and arrivals).
  • ROI businesses moving and supplying goods to NI will be required to report details of trade with NI on the Intrastat system (subject to the threshold limits) and VAT Information Exchange System (VIES).
  • Click here for HMRC’s guidance on Intrastat declarations and here for the Irish Revenue’s guidance on VIES and Intrastat.
  • There will also be a requirement to put an “XI” prefix in front of your VAT number on your invoices if moving goods from NI to EU and to provide your XI prefix in front of your VAT number when communicating with suppliers moving goods from EU to NI. Click here to check if you are trading under the NI protocol.


Supply of Services

The NI Protocol will not apply to the supply of services and NI will follow all UK VAT rules relating to services. Most services supplied between NI and the EU should not see significant changes for most sectors in respect of legislation and guidance, however, there may be some changes in terminology and invoice references. Further guidance is expected from the UK and EU on some of these issues.

Significant changes are expected in respect of the place of supply rules in relation to financial services. The UK has proposed to extend the specified supplies order so that relevant financial supplies to EU counterparties (including ROI) will give the right to recovery of associated UK VAT on costs after the transition period ends, although this may depend on the outcome of UK-EU negotiations. However, if this is legislated for in the UK, it is likely that ROI will introduce similar rules for VAT on financial services.

It is also expected that the “use or enjoyment” rules relating to place of supply of services will change in respect of both the UK and the EU . This is assuming the Cross Border Taxation 2018 Act is adopted unchanged. Click here to access current HMRC’s guidance on use and enjoyment rules. The current VAT treatment on other supplies of services between ROI and NI is not expected to change.

  • Click here to access the place of supply rules for services outlined by the Irish Revenue.
  • Click here to access the place of supply of services outlined by the HMRC’s VAT notice 741a .

Further guidance may be issued by both tax authorities and further changes may arise. 

TO AND FROM IRELAND AND GREAT BRITIAN 

Quick Links

The movements of goods between ROI and GB will be treated as exports and imports for VAT purposes.

The  Brexit Omnibus Bill introduced postponed accounting VAT for all importers registered for VAT in ROI. Postponed VAT accounting for imports would eliminate the VAT cash flow cost of imports resulting in a significant VAT cash flow benefit for traders.

The UK announced that it intends to introduce postponed VAT accounting in respect of all imports into the UK from both EU and non-EU countries from 1 January 2021 for businesses that are VAT registered in the UK.

  • Click here for more information from HMRC. From 1 January 2021, you must continue to submit UK Intrastat arrival declaration for goods you import from the EU (including ROI) into GB until 31 December 2021. You will no longer need to submit an Intrastat declaration for goods you export from GB to the EU as outlined in the  HMRC notice 60.


  • If you trade with GB after the transition period, the rules of trade with a non-EU country will apply between ROI and GB. Therefore, supplies and movement of taxable goods between ROI and GB will be subject to the VAT rules on exports and imports. Also, you will no longer have to report details of trade with GB on the Intrastat system or VIES. Intra-EU rules and simplifications, such as triangulation, will no longer apply to sales in GB.
  • ROI businesses may be required to register for VAT in GB as outlined in the Irish Revenue’s guidance on the  VAT implications of trade with GB. From 1 January 2021, you will need an EORI number to move goods between ROI/EU and GB.

For GB businesses, you’ll need an EU EORI number if your business will be making declarations or getting a customs decision in the EU. You can get this from the customs authority in the EU country where you submit your first declaration or request your first decision. Click here to access HMRC’s guidance on EORI numbers.

September 2021 Update:  A business not established in the EU or Northern Ireland wishing to register for IOSS is able to do so in any EU member state or in the UK. Further guidance from HMRC on this should be made available. To access the policy paper on the EU VAT e-commerce package, click here. Further information about the UK’s existing scheme can be found here. HMRC confirmed that postponed VAT accounting is available permanently. A checklist has been provided by HMRC to help navigation, and the details you may need to complete you customer declaration using CHIEF have been updated. Click here to check when you can account for import VAT on your VAT return.

Supply of Services

The current VAT treatment of supplies of services between ROI and GB will not change.

  • Click here to access HMRC’s VAT notice 741a on the place of supply of services
  • Click here to access the place of supply rules for services outlined by the Irish Revenue.

The UK (which includes NI for services) has proposed extending the  specified supplies order so that relevant financial supplies to EU counterparties (including ROI) will give the right to recovery of associated UK VAT on costs after the transition period ends. ROI and the EU may also decide to change its rules in the same way, but this is to be confirmed.

NORTHERN IRELAND – IRELAND – REST OF WORLD (NON-EU) 

Quick Links

The movements of goods between NI and the rest of the world will be treated as exports and imports for VAT purposes. From 1 January 2021, you will need an EORI number that starts with XI to export goods from NI to rest of world and importing into NI from rest of world. NI businesses will be issued with a unique NI EORI starting with XI. The XI EORI will also be used in respect of making a declaration in NI or to get a customs decision in NI in respect of GB to NI movements.

Click here to access HMRC’s guidance on EORI numbers.

Click here to access HMRC’s manual on place of supply of goods. 

Click here to access HMRC’s policy paper outlining how VAT will apply to goods imported into NI from non-EU countries.

The export/import treatment for movement of goods between Ireland/EU and rest of the world have not changed and more information can be found below.

Click here to access Irish Revenue  updates on VAT payments for Imports and Exports outside of the EU.

Supply of Services

The current VAT treatment on supplies of services between NI and non-EU countries is not expected to change.

Click here to access HMRC’s VAT notice 741a on the place of supply of services. Click here to access Irish Revenue treatment on VAT for services. 

VAT Factsheet

Mapping your supply chain will be important as there may be changes to your treatment of VAT either in the supply of goods and or services depending on which jurisdiction your trade is in. The NI Protocol provides that Northern Ireland will be subject to the same EU VAT rules on goods as EU Member States after the transition period. The Protocol provides that EU VAT rules on services will not apply to Northern Ireland after the transition period. Whilst NI maintains alignment with the EU VAT rules for goods, including goods moving to, from and within NI it will remain part of the UK’s VAT system. 

Useful Links 

Revenue is committed to actively engaging with businesses to help in identifying and understanding the potential customs implications of the new trading relationship with the United Kingdom.  Seminars and informational videos provided by the Irish Revenue on their Brexit guidance and support.

Irish Revenue’s  Brexit homepage with Information about trade facilitation and customs procedures for trade with the United Kingdom (UK) after the transition period. This includes information on customs declarations, information for trading with Northern Ireland and Great Britain. 

GOV.UK info on VAT on movements of goods between Northern Ireland and the EU, including ow to charge and account for VAT on the movement of goods between Northern Ireland and EU member states (VAT Notice 725).

GOV.UK  info on Customs, VAT and Excise UK transition legislation from 1 January 2021. This collection brings together Customs, VAT and Excise EU Exit legislation and Customs notices that have the force of law applicable to UK transition.

General information on the UK’s approach to the Protocol, a 23 page document published by the Cabinet Office in May 2020.

Protocol publication Ireland/Northern Ireland. A 63 page document detailing the revised protocol on Ireland and Northern Ireland included in the Withdrawal Agreement.

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