VAT on goods moving between Great Britain and Northern Ireland 

Supply chain

Brexit pulse alert: respond to the business impacts of Brexit

26 October, 2020

Brexit development

On 26 October 2020, the UK government published a policy paper providing further guidance on accounting for VAT on goods moving between Great Britain (GB) and Northern Ireland (NI) from 1 January 2021.

Top Brexit impacts

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. However, there are some exceptions: for goods in certain customs regimes or goods subject to the domestic reverse charge, it will be the customer or importer that will account for the VAT on their UK VAT return.

For movements of own goods from GB to NI, VAT will be due. However, a business will not be required to account for VAT when it moves its own goods from NI to GB.

VAT groups will continue to be able to include members that are established in both NI and GB. However, there will be changes where goods supplied by members of a VAT group move from GB to NI, or where goods in NI are sold between members.

Actions for business

  • Businesses should review the systems set up and processes in place to account for VAT on goods moving between GB and NI. This is particularly so where there is a change from the current position, e.g. for movements of own goods from GB to NI.
  • There will be no requirement for a new VAT registration for sales of goods in NI, but (per a draft Directive published by the European Commission) NI businesses will need a ‘XI’ VAT registration number in respect of trade with EU member states.

To discuss specific support with your Brexit preparations based on this latest development contact: Deloitte Brexit Insight

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