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VAT for businesses in Northern Ireland

On 1st January 2021 the VAT rules for companies based in Northern Ireland changed as the UK reached the end of the Brexit Transition period with the EU. Most of the changes will affect the movement of goods as a result of the Northern Ireland Protocol

Under the terms of the Northern Ireland Protocol, Northern Ireland remains aligned to the EU VAT rules for goods, but not for services. However, Northern Ireland will continue to adopt part of the UK’s VAT system. VAT registered businesses in Northern Ireland will continue to submit a single UK VAT return and retain their UK VAT registration number.

Below is a summary of the key changes. We recommend that you seek independent professional advice if you require a more detailed evaluation of the changes and how they could affect your business.

Movement of goods between Northern Ireland and Great Britain

For the movement of goods between Northern Ireland and Great Britain the VAT rules will remain mostly unchanged. VAT will be charged as if they are domestic UK supplies, although there is now a recognition that these movements are considered to be exports and imports for VAT purposes. There are also other certain exemptions that may affect the way VAT is accounted for. We recommend that you consult HMRC guidance and carefully evaluate your supply chains, systems and processes.

Movement of goods between Northern Ireland and the European Union

The terms of the Northern Ireland Protocol stipulates that Northern Ireland will remain aligned to the EU VAT system for goods (but not for services). This means that after the Brext Transition period there will be little change to how businesses in Northern Ireland trade with Ireland and the rest of the EU. One notable detail is that NI businesses trading in goods will be required to use an “XI” prefix in front of their VAT registration number rather than the “GB” prefix when trading with the EU suppliers and customers.

VAT options in QuickFile for NI businesses

We have now added a number of specific VAT options for businesses based in Northern Ireland. These options will appear within the invoice editor if your account is regsitered to a Northern Ireland postcode.

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The new VAT options focus on the provision of goods and services between Northern Ireland and the EU. Broadly speaking these changes will align to the previous EC VAT checkbox that appeared in the top right of the invoice and purchase editor but unlike they previous option they will now differentiate between goods and services ensure the correct box placements on your VAT return without the need to manually adjust.

You can find out more about the full range of VAT options in the guide below.

VAT Options Explained