VAT Registered Business moving goods from to NI

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Hi all,

 

I have a quick question if someone can clarify my thinking. 

Based on the following guidance below if a VAT registered business moves it's good from Mainland UK to Northern Ireland then they will have to account for import VAT on the movement. Is "the VAT on the movement" calculated on the cost of moving the goods (transportation) as their is no sale being made as the goods are only being moved between GB and NI.

 

As an example a motor trader in NI would purchase stock from GB, if they say paid £10,000 plus VAT for the vehicle at a auction house, they then "moved" the goods as they collect it themsleves (either personally or paying transportation) which counts as them moving it as the business they have purchased the goods from isn't delivering the goods to Northern Ireland. From that guidance would they then have to account for VAT again as import VAT and at what amount?

If they then sell the goods from their NI business then would reclaim their input VAT of £2,000 from their initial purchase invoice and charge the output VAT, how would the import VAT be factored at the point of sale if this was accounted for, would this just be reclaimed on the VAT return making a NIL effect on the import VAT

Thanks in advance

Replies (5)

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VAT
By Jason Croke
14th Jan 2021 12:39

A UK dealer selling to a Northern Ireland dealer, that would be a domestic UK supply, standard rated :
https://www.gov.uk/government/publications/accounting-for-vat-on-goods-m...

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Replying to Jason Croke:
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By jcurran
14th Jan 2021 17:00

The Northern Ireland dealer is purchasing the goods from GB Dealer, but the GB dealer isn't moving the goods to the NI dealer, the NI dealer is transporting the goods from GB to NI, which states per the link you included that they have to account for import VAT.

"Businesses moving their own goods from Great Britain to Northern Ireland
When a VAT registered business moves goods from Great Britain into Northern Ireland, VAT will be due. The business will need to account for VAT on the movement. This should be included as output VAT on the VAT return.

Where the goods are being used for taxable sales, the VAT may also be reclaimed as input VAT on its UK VAT return, subject to the normal rules.

Where a business uses the goods for exempt activities, or where the goods are put to a taxable use and also exempt use, it may be required to make an adjustment to its partial exemption calculations."

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paddle steamer
By DJKL
14th Jan 2021 13:10

Presume this is commercial vehicles not covered by secondhand rules, if cars how does it work?

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Replying to DJKL:
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By jcurran
14th Jan 2021 16:59

They currently have removed the margin scheme for VAT margin motor vehicles if a Northern Ireland dealer purchases them from the mainland UK then they have to charge plus VAT see link below.

https://www.gov.uk/government/publications/accounting-for-vat-on-goods-m...

Their was an announcement yesterday saying that it will be brought back in, but if a dealer from NI moves the goods from mainland UK as I advised in the initial post they then will be subject to Import VAT which will not allow access to the margin scheme

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VAT
By Jason Croke
15th Jan 2021 12:49

HMRC have published new guidance on this today, I will look to do a detailed article on this for Accounting Web over the next couple of weeks.

https://www.gov.uk/guidance/the-margin-scheme-on-second-hand-cars-and-ot...

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