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Moving Goods to N' Ireland, to sell to S' Ireland

What's the deal?

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Need to sell goods DDP per a contract.

If we sell from England (Great Britain), we will be charged Southern Irish VAT at 23% we cannot reclaim, we cannot raise the sales price by this as this is not accepted.

If we get a Northern Ireland EORI XI number, and sell from Northern Ireland to Southern Ireland, this looks to be deemed as Intra-community supply, so if we sell using incoterms DDP, we won't be charged VAT as there is none.

1) Is the above correct

2) Do we literally just need to move the goods to a warehouse in Northern Ireland before moving them to Southern Ireland? Or is there some complexity of having a site there??

Replies (27)

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By Wanderer
26th Apr 2022 18:14

Can't you sell them "DDP Dublin excluding VAT and other taxes."?

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Replying to Wanderer:
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By Truecon
26th Apr 2022 18:21

The customer doesn't want to pay VAT, only trades with EU.

DDP Dublin excluding VAT and other taxes would mean the customer does get charged VAT by the courier for Irish customs if transport from GB to Southern Ireland I assume?

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Replying to Truecon:
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By Wanderer
26th Apr 2022 18:25

Yeh, I can understand that, I mean I don't particularly want to pay VAT on almost everything I buy. Unfortunately I have to.

Is the customer a VAT registered business? If so what's the problem?
https://www.revenue.ie/en/customs-traders-and-agents/brexit/information-...

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Replying to Wanderer:
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By Truecon
26th Apr 2022 18:30

Yes, it doesn't make Sense Wanderer, hence this strange one I'm trying to confirm.

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Replying to Truecon:
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By Wanderer
26th Apr 2022 18:51

I'd take it as a little knowledge is a dangerous thing.

There's been too much rubbish spouted over the last 16 months by exporters, importers, freight companies & some HMRC representatives all of who like to sound authoritative when they don't completely understand what's going on.

What I would advise you NOT to do is start setting up an NI warehousing operation to try to get round this petty officialdom.

Just send the goods DDP Dublin (or wherever) excluding VAT and other taxes and let the idiot customer sort their paperwork out.

Try it with a small 'test' shipment first and see what happens.

Truecon wrote:

DDP Dublin excluding VAT and other taxes would mean the customer does get charged VAT by the courier for Irish customs if transport from GB to Southern Ireland I assume?

You assume wrong, see the PVA link I gave you and make sure the paperwork is correctly completed.
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Replying to Wanderer:
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By Truecon
26th Apr 2022 18:57

Thanks Wonderer, that's very helpful.

Although still leaves my question not fully answered.

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RLI
By lionofludesch
26th Apr 2022 18:18

[sigh]

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Replying to lionofludesch:
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By Truecon
26th Apr 2022 18:21

What have I missed, lionofludesch

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Replying to Truecon:
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By Wanderer
26th Apr 2022 18:26

As per your other thread "Southern Ireland".

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Replying to Wanderer:
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By Truecon
26th Apr 2022 18:29

Oh I see, I think the sin of referring to the Republic of Ireland as Southern Ireland for the purpose of clearly splitting North and South can be ignored for an accounting clarification, but maybe not!

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Replying to lionofludesch:
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By DKB-Sheffield
26th Apr 2022 18:27

lionofludesch if I may steal your usual response...

[chuckle]

Now we seem to have GB VAT and Southern Irish VAT. Can't seem to find any guidance on either!

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VAT
By Jason Croke
26th Apr 2022 19:17

You could register your business for VAT in Ireland and then ship from GB to yourself in Ireland, you pay the import duty/VAT in Ireland, reclaim the Irish import VAT n your Irish VAT return.

Then make a sale from Ireland to Ireland to your Irish customer, charging them Irish VAT. So you will be charging them Irish VAT, just as if they had bought from a local Irish supplier down the road. The customer would have no import paperwork to deal with and so this solution meets their requirements.

Your proposal for an XI EORI number, you'd need to obtain one from the Trader Support Service (TSS) or via the HMRC website (which takes you to the TSS microsite).

Useful link here, use the menu on the left hand side to find the section https://www.gov.uk/government/publications/accounting-for-vat-on-goods-m...

Also in that same link, look for the link to "onward supply to an EU Country" which explores in some more detail.

I've not got time tonight as going out later, but just wanted to give a starter answer to the query.

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Replying to Jason Croke:
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By Wanderer
26th Apr 2022 19:21

Jason Croke wrote:

Then make a sale from Ireland to Ireland to your Irish customer, charging them Irish VAT. So you will be charging them Irish VAT, just as if they had bought from a local Irish supplier down the road. The customer would have no import paperwork to deal with and so this solution meets their requirements.

Except for
Truecon wrote:

The customer doesn't want to pay VAT, .....

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Replying to Wanderer:
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By Truecon
26th Apr 2022 19:29

Wanderer wrote:

Jason Croke wrote:

Then make a sale from Ireland to Ireland to your Irish customer, charging them Irish VAT. So you will be charging them Irish VAT, just as if they had bought from a local Irish supplier down the road. The customer would have no import paperwork to deal with and so this solution meets their requirements.

Except for Truecon wrote:

The customer doesn't want to pay VAT, .....

That's right, hence the DDP- The intention is to sell from NI to ROI with no VAT charged to the customer, using DDP as we will be charged the non-existent VAT due to intracommunity supply

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Replying to Truecon:
VAT
By Jason Croke
26th Apr 2022 20:51

The phrase 'customer doesn't want to pay VAT' what does that mean exactly?

Even before Brexit, UK seller would zero rate and EU customer would reverse charge, so customer had to charge themselves EU VAT and then reclaim it...unless they were doing it wrong in the first place.

In my earlier suggestion, registering and charging Irish VAT means Irish customer is not out of pocket, they can reclaim Irish VAT.

Whereas if GB supplier pays the Irish import VAT (DDP), the GB supplier has to add this Irish VAT to the sale price and Irish customer cannot reclaim this Irish VAT as the VAT belongs to the GB supplier.

If the Irish customer simply doesn't want to pay any VAT, then they are asking the supplier to avoid VAT....I suspect the customer simply doesn't want to get involved in Irish import procedures......even though... Ireland operates a postponed VAT system exactly the same as UK does, so as others have suggested, just send it DAP, customer postpones the VAT/accounts for it on their irish VAT return...EXACTLY as they did before under reverse charges rules pre Brexit.

Not being funny but the customer clearly doesn't even know their own VAT rules, just easier to demand they want stuff without VAT (whatever that means).

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Replying to Truecon:
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By DKB-Sheffield
26th Apr 2022 21:06

Listen to Jason's advice. He has a 'little'* knowledge in this area. You may find the Brace for Brexit articles and subsequent articles he wrote (and co-wrote) to be a useful source of info.

There is however no such scenario where neither you, or the customer, have to deal with VAT at some stage. What would you do with a UK supply? If the customer doesn't wish to pay VAT... do you simply not charge it?

* Little in this instance means vast!

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Replying to DKB-Sheffield:
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By Truecon
27th Apr 2022 12:03

Thanks DBK, however this didn't answer the question!

I'm not enquiring on best process unfortunately, in which case I would completely agree.

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Replying to Truecon:
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By DKB-Sheffield
27th Apr 2022 14:09

You may have misinterpreted my (somewhat) over-simplification of the facts. I refer primarily to the concept of 'no VAT' on intra-EU goods (and extra-UK services) which is often misunderstood/ misquoted.

With intra-UK taxable sales of goods and services Output VAT is charged. The customer can reclaim the VAT (where eligible). Thus it could be said that total VAT cost to the customer is 'Nil'. That is straight forward.

By placing a land/ sea/ air border in the middle this only changes where the VAT is charged. It doesn't make a taxable supply non-taxable. It does change what, where, when, how, and by whom, the VAT is charged!

VAT is charged on the 'import' (or for intra-EU 'acquisition') at the relevant rate in the customer's country. It will (likely) mean the VAT is charged at different rates. In IE this may be standard, reduced, second reduced, zero... and others! You may actually be surprise to find that some 'standard' supplies in the UK are R, 2R or even Z in IE!

It may seem (to the customer) that there is no VAT payable on intra-EU as the acquisition is subject to a 'reverse charge' mechanism and they will not (generally) pay any VAT over to the Revenue. This could also be said to be true under PVA or RC for services.

However, it's also important to consider the default position whereby a (VAT Reg) customer is unable to 'reclaim' VAT (e.g. they are wholly or partially exempt). In that case, the R/C Output is payable but some (or all) of the input is blocked.

I have a client operating in the UK and 2 member states (one of which is IE). They move goods (and supply services) between the 3 countries AND import (goods and services) from overseas (non EU). All companies are Partially Exempt. It's a complex structure but, there is one thing that is for certain... there is no such thing as 'no VAT' (except on the exempt supplies and/ or purchases).

The big issue you are faced with is NOT trying to make a taxable supply 'non-taxable' but to ensure you, and your customer don't end up with irrecoverable VAT (and duty!)... or that you don't end up with a costly and logistical nightmare in trying to achieve this (handling costs can be extremely high)! This is where Jason's advice is of great value!

Incidentally, there is an assumption that your customer is VAT registered in IE, and that your supply is B2C.

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Replying to DKB-Sheffield:
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By Wanderer
27th Apr 2022 14:15

DKB-Sheffield wrote:

...... and that your supply is B2C.

Did you mean to say B2B rather than B2C?
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Replying to Wanderer:
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By Truecon
27th Apr 2022 14:54

I believe DBK does, very useful answer regardless!

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Replying to Wanderer:
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By Truecon
27th Apr 2022 14:54

I believe DKB does, very useful answer regardless!

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Replying to Wanderer:
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By DKB-Sheffield
27th Apr 2022 15:44

Oops...!

Yes, of course... B2B!!!

Thanks!

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Replying to Wanderer:
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By DKB-Sheffield
27th Apr 2022 15:44

Oops...!

Yes, of course... B2B!!!

Thanks!

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VAT
By Jason Croke
27th Apr 2022 09:54

Some additional reading.

https://www.revenue.ie/en/customs-traders-and-agents/brexit/customs-decl...

and

https://www.revenue.ie/en/customs-traders-and-agents/documents/imports-a...

We cannot avoid the fact that there is a massive trade border between the UK and EU, that border is either in Northern Ireland or in Ireland, we can't negate the customs border. Moving goods from England to NI and then to Ireland is entirely possible, but the question is more about customs procedures rather than VAT.

You would need to register with the TSS https://www.tradersupportservice.co.uk/tss and obtain an XI EORI number, you then need to liaise with the TSS or your carrier as to what customs procedure codes are required to facilitate the movement and ensure the customs procedures are completed correctly.

In theory, you move your own goods from GB to NI, you declare output tax on that movement on your VAT return and then you would also reclaim the same as input tax on the basis you intend to onward sell the goods. You would then make a zero rate sale to the Irish customer but using your XI VAT/EORI number on the invoice, declaring it on your UK VAT return in Box 8, submitting an ECSL using Irish customers Irish VAT number....but you'd need to work with the shipper/TSS to ensure the correct onward supply relief rules are followed.

Read the whole of this page (link below) and at bottom, click on "how to claim VAT relief" read whole page and note the links for EC Sales lists and "how to complete your VAT return". This all assumes you are doing the customs filing yourself but realistically you'll be using DHL or whoever and so the conversation is to be had with them.
https://www.gov.uk/guidance/check-if-you-can-claim-vat-relief-on-goods-i...

The Irish customer would still then have to reverse charge the purchase on their Irish VAT return.

It all sounds like a lot, and it is, certainly for a one-off job, but if this is a regular customer then once set-up (XI EORI, ECSL, carrier/TSS informed) then it'll be like clockwork, but it is still just easier for the customer to use Irish postponed VAT to be honest.

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Replying to Jason Croke:
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By Truecon
27th Apr 2022 11:59

Jason, this is exactly what I meant. Thank you for a thorough answer.

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By tom123
27th Apr 2022 10:11

I suspect the 'customer' never used to "reverse charge" anything, obviously wrongly, pre Brexit.

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By Truecon
27th Apr 2022 11:27

Maybe so Tom ^

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