Share this content

Irish Company UK VAT registered - Refund on import

Didn't find your answer?

Hi everyone,

I just joined although have been a long time reader. I just wanted to ask a question regarding UK VAT as I am not too familiar with how this scenario works. 

We are a wholesale medical device company Headquarted in Ireland but have recently opened a warehouse in the UK. We registered for UK VAT as we will have to make sales within the UK and also import goods from the Far East directly into the UK. I also run a separate UK company where VAT returns etc are easy but I just wanted to check that the same general principles will apply. 

As an Irish company which is registered for UK VAT am I right in saying I can claim back VAT in the following circumstances:
1) VAT charged on imports from the Far East is refundable 
2) VAT on expenses incurred within the UK (office supplies, services etc.) is refundable
3) VAT is chargable on sales to our UK customers where the products are distributed from our UK warehouse. 

The ideal scenario I suspect is to open up a UK subsidiary for our UK operations but this will take some time as we have existing contracts with the NHS based on our Irish company details, address etc. It may be difficult to change this since the tenders were done in this way and we were evaluated as an Irish company.  

Thank you for any help or advice!

Replies (8)

Please login or register to join the discussion.

avatar
By David Ex
05th Jul 2022 12:59

If you don't have some "heavyweight" tax advisers appointed, you really would be well advised to do that now. Was advice not taken before the UK warehouse was planned and then opened?

https://www.accountingweb.co.uk/any-answers/how-to-use-any-answers

The site owner says Any Answers is “ ... not here to provide free accounting advice”.

Thanks (1)
avatar
By Fergal90
05th Jul 2022 13:08

Thanks for the response David, apologies I had not read that rule you quoted before posting. I thought this was a fairly simple question and as a very small business I had already consulted our accountants who said if we apply for UK VAT we should be able to operate here the same as a UK HQd company. I just got a bit concerned because I couldn't find any advice regarding our scenario online (it keeps referring to moving products between the 2 countries). Perhaps some 'heavyweight tax advisors' are required as you suggest.

Thanks (0)
Replying to Fergal90:
avatar
By David Ex
05th Jul 2022 13:20

Fergal90 wrote:

I thought this was a fairly simple question

Anything cross border is pretty well guaranteed to be not "fairly simple". Not trying to be funny but getting tax right or wrong can be the difference between financial viability and not. Anything that is not properly planned and researched before implementation risks problems (as the penultimate paragraph of your OP demonstrates).

Thanks (1)
VAT
By Jason Croke
05th Jul 2022 13:36

You don't need a UK subsidiary, certainly from a VAT perspective.

You are correct with regard your points 1 to 3.

Presumably when you applied for the UK VAT number, you also applied for a GB EORI number (and also an XI EORI number), you will need a GB EORI number when importing goods into the UK (whether from far east or from EU).

if you already have an EORI number, you should enrol for Postponed Import VAT Accounting (PIVA) as this way, you avoid paying import VAT when the goods enter the UK, instead you declare the import VAT on your VAT return and reclaim it on the VAT return (similar to reverse charge).

Thanks (1)
Replying to Jason Croke:
avatar
By Fergal90
05th Jul 2022 13:43

Thanks for the reply Jason. We do have a GB VAT number and a GB EORI number and have already imported goods a few weeks ago using our GB EORI No. (VAT and duty was done through the logistics company VAT account under our name until we have PIVA I believe). I will have our accountants apply for PIVA as you suggest. You have certainly alleviated my concerns on points 1 to 3 but both you and David have highlighted the fact that I will require more specialist advice going forwards since we are in the very early days.

Thanks (1)
avatar
By Ben Adams
05th Jul 2022 15:58

One other thing to consider is you've probably create a permeant establishment of your Irish company in the UK.

If so, you'll need to register it with companies house and HMRC. You'll also need to pay UK corporation tax on its UK profits. Then you'll also have to consider the impact of this in your Irish tax return with the potential to claim double tax relief.

Thanks (0)
avatar
By Ben Adams
05th Jul 2022 16:00

-

Thanks (0)
avatar
By Ben Adams
05th Jul 2022 16:00

-

Thanks (0)
Share this content