A UK business that’s VAT-registered doesn’t need to charge VAT on goods that it sends to Ireland, as long as it keeps documentary proof of export. Following Brexit on January 1st 2021, companies in Northern Ireland have a new VAT number starting with XI instead of GB. A UK business that’s VAT-registered doesn’t need to charge VAT on goods that it sends to Ireland, as long as it keeps documentary proof of export. The aim, again, is for VAT to be accounted for in the jurisdiction of the customer, in this case, Ireland. It uses the Northern Ireland Protocol, which is part of the Withdrawal Agreement between the UK and EU that aimed to avoid a customs border (known as a hard border) between Northern Ireland and the Republic of Ireland (ROI). Now the simplified rules will not be applicable for Great Britain. Complete your VAT return to account for import VAT. Next: Importing from Great Britain Policy paper Accounting for VAT on services between the UK … Northern Ireland will remain part of the UK VAT area but the EU VAT rules concerning goods will continue to apply in Northern Ireland. Devolving corporation tax to Scotland or Wales could create unwelcome tax competition between different parts of the UK (although, as noted, it was proposed in Northern Ireland specifically to allow the north to compete with the Republic of Ireland). Let's see what the For Northern Irish car buyers, Northern Ireland car dealers have been assured that VAT will now not be applied to the purchase price of vehicles moved from Great Britain to NI. It applies to most goods and services. From the 1 January 2021, following the end of the transition period the UK is no longer governed by the EU VAT and Excise regime. These provisions will not apply to supplies of services in Northern Ireland, which will be subject to UK VAT rules after the transition period ends. Check the UK VAT requirements here. Organisations need to fully understand the implications and practical aspects of the Northern Ireland Protocol and how to apply the new rules when moving goods between GB, NI and the EU. What if goods are imported into the UK from non- W hen the Brexit transition period ends on 31 December 2020, Northern Ireland will be the only land border between the UK and the EU. The UK tax authority has published guidance on the VAT treatment of goods moving between Great Britain and Northern Ireland from 1 January 2021. Northern Ireland. The Northern Ireland Protocol means that Northern Ireland maintains alignment on some administrative processes within the EU VAT rules … The United Kingdom (UK) Government has issued guidance providing information regarding when a business that is registered for value added tax (VAT) in the UK can or must, account for VAT on its tax return for movements of goods between Great Britain (GB) (i.e., England, Wales and Scotland) and Northern Ireland. Brexit’s impact on shipping to Northern Ireland. 1. One option would be to keep your boat in NI and nip over the boarder to ensure the boat is in ROI at the end of the transition. Although Northern Ireland is part of the UK, all supplies of goods to and from Northern Ireland will, as a result of the Protocol on Ireland and Northern Ireland, remain subject to the same VAT regime that was applicable before 1 January 2021. The Northern Ireland Protocol will come into force on 1 … Accordingly, this would mean that for sales to Northern Ireland, the same treatment as at present would continue to apply. Update VAT numbers with prefix XI as mentioned above. Thanks Elliott The Protocol on Ireland and Northern Ireland applies from 1 January and provides that the Union Customs Code will continue to apply to and in Northern Ireland. Northern Ireland will remain part of the UK VAT area but the EU VAT rules concerning goods will continue to apply in Northern Ireland. It is distinctly possible in the longer term in the context of a Brexit trade agreement between the UK and EU, that there would be some kind of arrangements which continue the present VAT rules. Brexit would change the position in relation to VAT unless some kind of special EU UK-VAT arrangement is entered. VAT changes under Northern Ireland Protocol. Accordingly, the UK’s implementing legislation for the Protocol seeks to ensure that, in so far as is possible, the VAT accounting treatment for goods moving between Northern Ireland and Great Britain remains as close as possible to the pre-Brexit approach i.e. Distance sales rules continue to apply to B2C supplies between the EU and Northern Ireland; Sales of goods between the UK and Northern Ireland will be treated as a sale of goods into and out of the EU VAT territory. Update all BP master records and organizational units from NI business units with the region. The current VAT treatment of sales of goods between Ireland and Northern Ireland will continue to apply. For businesses importing goods from Britain to Northern Ireland, EU import VAT is levied, but is eligible for deferment through postponed VAT accounting. The operational aspects of the arrangements will need to be worked out but we expect the current VAT treatment of sales of goods between Ireland and Northern Ireland should continue to apply. If the UK company was the customer, again, the supplier has to worry about UK import VAT. As such, a UK-EU deal will have a greater impact on Northern Ireland’s trade with the rest of the UK than the UK Internal Market Bill. Sales of goods from Great Britain to Northern Ireland, and within Northern Ireland, by members of a UK VAT group, VAT Retail Export Scheme. Under the Northern Ireland Protocol, from 1 January 2021 NI will maintain alignment with the EU VAT rules for goods (not services), but remain part of the UK’s VAT system. For most sales of goods between GB and NI, the seller will continue to account for output tax and charge VAT on its invoices as it does now. In the context of the backstop in the (unratified) Withdrawal Agreement, Northern Again, this represents very little change to services VAT which will come as a relief to suppliers. Statistical reporting & returns for trading with EU. Accounting for VAT on goods moving between Great Britain and Northern Ireland from 1 January 2021. Therefore, if suppliers trade with the UK (subject to the conditions of the Protocol on Ireland and Northern Ireland) the VAT rules for trade with non-EU businesses started applying. Accounting for VAT on services between the UK and EU member states from 1 January 2021 4. Post-Brexit VAT changes between the Republic and Britain have added thousands of euro to the cost of imported second-hand cars from England, Scotland and Wales - but not Northern Ireland… This may also be known as ‘evidence of removal from the UK’ and it must show that a supply has taken place, and the goods have left the UK. Why are Intrastat declarations still required for the movement of goods between NI and the EU? The United Kingdom (UK) left the European Union on 31 January 2020. Northern Ireland VAT Triangulation. Trader Support System (TSS) Due to the UK’s obligations under the Northern Ireland Protocol, customs declarations will be required when moving goods between Great Britain and Northern Ireland, or into Northern Ireland from outside the UK. Following the agreement of the Northern Ireland Protocol, HMRC has published guidance on the movement of goods to and from mainland UK (to be known as Great Britain) to NI and also across the Irish land boundary. tariffs may apply to goods that are not EU or UK originating. To facilitate […] If you travel with goods by air or sea between Great Britain and Northern Ireland If you carry goods from Great Britain to Northern Ireland by commercial sea or … 7. Therefore, if the backstop or something like it came into force under some future agreement, supplies directly to Northern Ireland would be intra-EU supplies and intra-EU acquisitions and the Northern Ireland side. EU laws mean that the same VAT rates had to apply across the UK. It is important to note that these changes do not apply with respect to trade in goods between Ireland and Northern Ireland. The United Kingdom (UK) Government has issued guidance providing information regarding when a business that is registered for value added tax (VAT) in the UK can or must, account for VAT on its tax return for movements of goods between Great Britain (GB) (i.e., England, Wales and Scotland) and Northern Ireland. Click here for more information. The standard VAT rate in Ireland is 23%. The Northern Ireland Protocol is part of the Withdrawal Agreement, setting out the terms of the UK’s departure from the EU, and will apply regardless of whether the UK and EU reach a deal on their future relationship. These purchases will be treated as EU intra-community acquisitions as at present. How are goods moving between the EU / UK and Northern Ireland (NI) impacted? Devolving corporation tax to Scotland or Wales could create unwelcome tax competition between different parts of the UK (although, as noted, it was proposed in Northern Ireland specifically to allow the north to compete with the Republic of Ireland). The amendment provides that traders in NI should use an alternative VAT number for the purpose of transactions relating to goods with the EU. Nothern Ireland remains within the EU VAT regime for certain goods transactions. They also make associated savings and transitional provisions. The super-reduced rate is 4.8%. The UK will have complete control over its reduced VAT rates, which are currently restricted within … This means that the seller of the goods will continue to charge its custom-ers VAT and should show this on its invoices. HOWEVER: The UK VAT on NI to the UK VAT interpretation is a variation on this. Under the Northern Ireland Protocol, from 1 January 2021 NI will maintain alignment with the EU VAT rules for goods (not services), but remain part of the UK’s VAT system. Accounting for VAT. The UK HMRC have stated that a EU28 VAT paid boat will retain its UK VAT status wherever it is at the end of the transition period. Those talks are covering around 30 issues ranging from VAT on used cars, to pet travel and the movement of food products from Great Britain to Northern Ireland. The prefix “XI” should be included in NI trader’s VAT number in those transactions. Under the Northern Ireland Protocol, trade in goods between Northern Ireland and Ireland, and between Northern Ireland and EU Member States, will continue unaffected, with no change at the border, no new paperwork, and no tariffs or regulatory checks. This is in line with the … Northern Ireland border with the EU stays open, which means goods imported to Great Britain (England, Scotland, and Wales) from there will be imposed with the UK import VAT. Northern Ireland border with the EU stays open, which means goods imported to Great Britain (England, Scotland, and Wales) from there will be imposed with the UK import VAT. During this period the UK, for the purposes of Value-Added Tax (VAT), was treated as if it was a full European Union (EU) Member State. Irish entities trading goods with GB customers … The latest update includes changes made to the policy paper on the following topics: VAT retail exports; Personal exports of vehicles from Northern Ireland … A VAT invoice should be issued with a notation that VAT is to be accounted by the UK business customer by way of a reverse charge (this replaces acquisition VAT). In most cases, VAT will continue to be accounted as it was before Brexit on goods and services sold between Northern Ireland and the rest of the UK. After Brexit the general position will be that where an Irish business provide services to a business customer in the United Kingdom, VAT will not be chargeable in Ireland.Under the corresponding VAT legislation in United Kingdom VAT would be chargeable in the United Kingdom to the business recepient. Do anyone know if we can do this or does the fitting has to go to southern Ireland. Postponed Accounting will not apply to goods purchased from Northern Ireland. However, as the UK-wide VAT rules for services will apply to NI, NI VAT-registered businesses will be required to follow a dual VAT … • The customs, VAT (and regulatory) provisions set out in the Protocol apply to supplies of goods, but not to supplies of services; • NI remains part of the customs and VAT territory of the UK, but certain EU rules apply in respect of Northern Ireland (although these are administered by the UK); Organisations need to fully understand the implications and practical aspects of the Northern Ireland Protocol and how to apply the new rules when moving goods between GB, NI and the EU. In the case of the United Kingdom, it is proposed to retain a VAT system equivalent to that in Ireland and the EU generally, so that VAT will be chargeable on the imports of goods and the provision of services in the UK under the same conditions as apply to any third country, post Brexit. • Northern Ireland will remain in the UK VAT area but will align with EU VAT rules. Since NI VAT after the Brexit transition period will be inside the UK and EU VAT regimes, the guidance clarifies how the anti-fraud measures will apply.. For NI, there will be no significant difference with the changes to the rest of the UK (‘GB’). We got a client that wants us to send a light fitting to Northern Ireland and not charge him VAT as he has supplied a southern Ireland VAT number. There is no border between Northern Ireland and Ireland. Difference between importing from the UK and importing from Northern Ireland. Changes to accounting for VAT for Northern Ireland and Great Britain from 1 January 2021; HM Revenue & Customs. This may also be known as ‘evidence of removal from the UK’ and it must show that a supply has taken place, and the goods have left the UK. UK except Northern Ireland (NI). This January 2021 VAT Snapshot is heavily focused on Brexit related issues. Continue to use the existing VAT rate codes 4, 7, 8 for reverse charge VAT on goods supplied from an EU business. From 1 January 2021, Northern Ireland (NI) continues to follow the EU’s VAT rules for goods. B2C Sale of Goods from GB to NI: If the recipient is a resident of NI, UK VAT is due and must be charged by the GB seller. They could think about a UK VAT registration with Postponed VAT Accounting. In the case of Northern Ireland, Services are excluded from the Northern Ireland Protocol, so sales of services between Northern Ireland and the Ireland/EU from 1 January 2021 will be treated like Third Country supplies. NI is not treated as a Member State with regard to VAT on services. The present EU arrangements would apply in respect of all territories except the United Kingdom. Northern Ireland will follow both the EU as well as the UK VAT system. You will find further information in VAT and trade with Northern Ireland. In Northern Ireland, the UK is authorized to apply reduced rates and exemptions in line with Irish VAT law. Yes. This policy paper confirms that under the Protocol, Northern Ireland maintains alignment with the EU VAT rules for transactions in goods. located in Northern Ireland (or the EU) by non-EU businesses to non-VAT registered customers in EU and Northern Ireland consumers; from Great Britain to consumers in Northern Ireland and the EU; Overview. How much is VAT in Ireland? The Withdrawal Agreement, including the Protocol on Ireland/Northern Ireland, provided for a transition period until 31 December 2020. VAT on goods sold between Great Britain and Northern Ireland VAT will continue to be accounted as it is currently on goods sold between Great Britain and Northern Ireland. The risk of Brexit tariffs would have to be considered, too. Note: There are no changes in VAT treatment for the movement of goods between Northern Ireland and the EU, so you would still use VAT code 8 for EU countries. Ireland also has some zero-rated goods, the sale of which must still be reported on your VAT return, even though no VAT … Northern Ireland will remain within the UK VAT regime, but EU VAT rules on goods (not services) will apply under the terms of the Northern Ireland Protocol. • The customs, VAT (and regulatory) provisions set out in the Protocol apply to supplies of goods, but not to supplies of services; • NI remains part of the customs and VAT territory of the UK, but certain EU rules apply in respect of Northern Ireland (although these are administered by the UK); The operational aspects of the arrangements will need to be worked out but we expect the current VAT treatment of sales of goods between Ireland and Northern Ireland should continue to apply. The place of supply rule to be applied depends on whether the customer is a business or a consumer. Special status of Northern Ireland. These Regulations amend various statutory instruments relating to value added tax (“VAT”) for the purpose of making changes that are appropriate in consequence of, or otherwise in connection with, the withdrawal of the UK from the EU. VAT on goods sold between Great Britain and Northern Ireland • For goods sold between Great Britain and Northern Ireland, VAT will continue to be accounted for as it is currently. However, based on the Ireland/Northern Ireland Protocol, Northern Ireland will remain under EU VAT legislation regarding trade in goods with a view to avoiding a hard border between Ireland and Northern Ireland. Sales of goods on board ferries between Great Britain and Northern Ireland. The NI Protocol is only valid for goods (not for services). In accordance with this protocol, Union legislation on VAT will continue to apply in Northern Ireland also after 31 December 2020 as regards goods so as to avoid a hard border between Ireland and Northern Ireland. From 1 January 2021, every business will need an EORI number starting with XI in order to import/export of goods between Northern Ireland and non-EU countries.Please note that as the UK will effectively be considered a non-EU country from 1 January 2021, this requirement also applies to businesses wishing to import/export goods between Northern Ireland and the UK. It has chosen to treat GB vs NI as a domestic transaction. The UK continues to levy VAT and the rules relating to UK domestic transactions continue to apply to businesses as they did previously. to be decided between the UK and the EU before the end of the transition period. The UK Government has established a Trader Shared Service to support Customs processes to NI. Goods sold and transported from Northern Ireland to the EU, and vice versa, will be treated the same as cross-border supplies of goods within the EU, including for VAT exemptions and deductions. Vehicles first registered in the UK and then registered in Northern Ireland before January 1st 2021 do not require a customs declaration. The EVR system can be used to reclaim VAT expended on goods in Northern Ireland. Aside from the recently implemented IFRS standards, UK customs regulatory changes are also undergoing a massive overhaul this 2021. Though NI is part of UK’s VAT system, EU VAT rules will still be applicable in NI. As a business owner, you are responsible to account for VAT on receipt of these services under the reverse charge. Following our last article published on 25 November 2020, HMRC has recently updated its policy paper outlining the VAT accounting processes that will apply to goods moving between Great Britain and Northern Ireland 1 January 2021.. The Since Brexit, Northern Ireland (NI) is in a uniquely complex situation in relation to international trade. It was feared that Brexit-related changes would mean it would be more expensive for NI car dealers to source second-hand vehicles from GB. The Northern Ireland Protocol means that Northern Ireland maintains alignment with the EU VAT rules for goods, including on goods moving to, from and within Northern Ireland. Businesses Moving Their Own Goods Between Great Britain and Northern Ireland VAT procedures on the whole remain as those prior to 31 December 2020, but there have been some changes to the VAT rules and procedures for transactions between the UK and EU member states. You must account for this VAT in your Irish VAT return at the appropriate rate of VAT in Ireland. The VAT Return and Annual Return of Trading Details (VAT RTD) will require additional entries relating to postponed accounting. This means that the seller of the goods will continue to charge its customers VAT and should show this on its invoices. If you ship goods between the EU / GB / NI then please sign up for this service. • Northern Ireland must also align with certain EU rules in areas such as agri-food and industrial products. Northern Ireland continues to be subject to the same EU VAT rules on goods as EU Member States. EU VAT rules on services do not apply to Northern Ireland. A Brexit readiness notice on VAT on goods, including guidance on open movements on 1 January 2021, has been published by the EU Commission. These requirements will continue to apply to all UK VAT registered businesses regardless of whether they are resident in the UK or not. Effective 1 January 2021, the UK will leave the EU VAT system. This policy paper confirms that under the Protocol, Northern Ireland maintains alignment with the EU VAT rules for transactions in goods. Northern Ireland will remain part of the UK VAT area but the EU VAT rules concerning goods will continue to apply in Northern Ireland. EU laws mean that the same VAT rates had to apply across the UK. This includes the EU-UK Trade and Cooperation Agreement, Irish import VAT procedures, trade via Northern Ireland and the impact of Brexit on the VAT treatment of service transactions as a result of VAT … Goods sold on board ferries between GB and NI will continue to have UK VAT applied and this will be accounted for on the seller’s UK VAT return. This policy paper confirms that under the Protocol, Northern Ireland maintains alignment with the EU VAT rules for transactions in goods. Vehicles First Registered in UK and then in Northern Ireland. To facilitate this, the VAT Directive has been amended. Ireland and the EU, and some low value imports into Northern Ireland from 1 July 2021. Since 1st January 2021, the border on the island of Ireland is the only external EU land border between the UK and EU, so the question of how to operate between the border of Northern Ireland and the Republic of Ireland for people (immigration), as well as goods needed to be resolved. Northern Ireland businesses will have an XI identification number which will enable them to be linked into the EU VAT system when filing … Northern Ireland (NI) continues to be treated as an EU Member State with regard to VAT on goods. VAT on goods moving between Great Britain and Northern Ireland after Brexit transition period. Since Brexit, Northern Ireland (NI) is in a uniquely complex situation in relation to international trade. receive services from the UK (including Northern Ireland), different place of supply rules for Value-Added Tax (VAT) on services apply. We are a UK based VAT registered company. The UK tax authorities – HMRC – will remain responsible for collecting VAT in Northern Ireland. Following the agreement of the Northern Ireland Protocol, HMRC has published guidance on the movement of goods to and from mainland UK (to be known as Great Britain) to NI and also across the Irish land boundary. UK except Northern Ireland (NI). Statistical reporting & returns for trading with GB. Vehicles first registered in the UK and then registered in Northern after January 1st 2021 are not subject to customs duty or VAT, provided there is proof the vehicle was properly imported to Northern Ireland. This mirrors an EU-wide reform, which the UK is implementing in Northern Ireland in line with the obligations set out under the Northern Ireland Protocol, where EU VAT rules with respect to goods will continue to apply in Northern Ireland. Accounting for VAT when importing or moving goods into Northern Ireland from outside the EU. For most sales of goods between GB and NI, the seller will continue to account for output tax and charge VAT on its invoices as it does now. Important information for businesses who move goods between Great Britain and Northern Ireland from 1st January 2021. The VAT charged will be accounted for as output However, Northern Ireland is, and will remain, part of the UK’s VAT … The problem for bangers - along with burgers and other chilled meats - is a section of the Brexit deal called the Northern Ireland Protocol, which the UK and the EU signed up to. Different VAT and customs arrangements will apply in respect of Northern Ireland (see our article on Northern Ireland). As a result, a significant change to VAT accounting for goods is that sellers will need to use the prefix ‘XI’ instead of GB, in front their UK VAT registration number when: Their goods are located in Northern Ireland at the time of sale to customers Receiving goods in Northern Ireland from VAT registered EU companies for business purposes 6. However under the Northern Ireland Protocol NI businesses remain aligned to many EU VAT rules for the movement of goods (while following UK VAT rules on services). For businesses importing goods from Britain to Northern Ireland, EU import VAT is levied, but is eligible for deferment through postponed VAT accounting. Essentially, Northern Ireland will be subject to a dual VAT system: the EU VAT legislation for goods on the one hand and the UK VAT rules for services on the other hand. NI entities trading goods with EU entities will still … The provisions in the draft EU-UK agreement do not govern trade in goods between the EU and Northern Ireland, where the Protocol on Ireland and Northern Ireland now applies (see next section from Question 14 below). Ireland will be a third country for UK VAT purposes. While Ireland is an EU member state and Northern Ireland is part of UK, it is going to be difficult for VAT accounting. The UK’s HMRC has provided guidance on how its 2021 ecommerce VAT changes will be applied to goods moving through Northern Ireland (NI). HMRC has issued new guidance, clarifying the VAT rules regarding movements of goods between Great Britain, Northern Ireland and the European Union (EU) from 1 January 2021. and are not subject to customs duty or VAT. Business to business services (B2B) The NI Protocol provides that EU VAT rules on services will not apply to Northern Ireland after the transition perio d. 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. The two reduced VAT rates are 13.5% and 9%. When it comes to customs and VAT after the end of the transition period, Northern Ireland isn’t like the three other countries that comprise the UK. However, since the UK’s VAT rate is 20 per cent, nothing is likely to change All movement of goods between the UK and EU count as imports and exports, meaning they are subject to import VAT
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