Independent VAT Consultant
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Brace for Brexit 15: Trading in goods with Northern Ireland

The government has published a Taxation Bill which will implement key aspects of the Northern Ireland protocol into UK legislation. Neil Warren considers what this will means for businesses.

11th Dec 2020
Independent VAT Consultant
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Brace for Brexit

As far as VAT and services is concerned traders in Northern Ireland (NI) will follow the same rules as GB countries (England, Wales and Scotland). We will still refer to ‘UK VAT rules for services’ when the transitional period with the EU ends on 31 December, the same way as now. But that is not the case with goods – NI will not be a member of the EU but will continue to follow EU rules for goods as a member of the customs union and single market.

EU rules remain

A business based in Northern Ireland will follow UK VAT rules for services and EU VAT rules for goods from 1 January 2021. The Brexit VAT changes for goods only apply to a business based in GB ie England, Scotland, Wales.

For example, a NI based business registered for VAT will continue to make acquisitions of goods from EU countries, rather than imports, and sales of goods to VAT registered customers in EU member states will be disposals rather than exports.

The NI business will still follow the EU rules for triangulation, distance selling and call-off stock. Even the retail export scheme will survive, which will be abolished in Great Britain (GB) on 31 December 2020, much to the chagrin of many GB retailers. Any NI VAT registered business trading with an EU supplier will need to use the prefix XI before their VAT number instead of GB.

Movement of goods between GB and NI

There will be no tariffs or customs processes on goods that are imported into NI from the Republic of Ireland. However, a UK customs regime will apply for goods moving from NI to GB if they don’t qualify for unfettered access.

Goods moving from GB to Northern Ireland will not be subject to duty as long as they are “not at risk” of entering the EU. The Treasury will define “at risk” in the coming weeks. But an entry summary with a safety and security declaration must be submitted before the goods arrive.


The sale of most goods by a GB business to one in Northern Ireland (and vice versa) will follow the same VAT rules as we currently have, ie they will be subject to UK VAT at the appropriate rate: 0%, 5% or 20%. There are a number of exceptions for goods that involve a special customs procedure, or where they are subject to the domestic reverse charge rules, and goods subject to an ‘onward supply’ procedure.

In Brace for Brexit 16, I’ll consider the VAT issues for a business moving its own goods from GB to NI, and a complication for businesses that are partly exempt.

Postponed VAT accounting

This will apply to goods imported from anywhere in the world for GB businesses from 1 January 2021 (see Brace for Brexit 2). However, postponed accounting will still be relevant for a NI business on their imports of goods from outside the EU and GB, a welcome cash flow saving.

Finally, a NI business will still need to complete EU Sales Lists (ESL) for sale of goods to VAT registered customers in other EU countries, but not in the case of services.

Trader Support Service

If a business moves goods between GB and Northern Ireland, including by parcels, then a new trader support service (TSS) will be available to help deal with declarations and the extra paperwork involved in trading. The TSS is free-to-use and it will guide businesses through the steps needed to comply with the legislation. So, act now and sign up for the TSS - the online facility apparently includes educational products such as training and webinars.


A week is a long time in politics, as the old saying goes. This article is correct at time of writing (11 December 2020) but who knows, there might still be a few twists before the end of the transitional deal.

Replies (2)

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By ColinNibbs
14th Dec 2020 09:47

I have a GB client who repairs jewellery for NI clients. The jewellery belongs to the customer of the NI client. Is that a service or supply of goods, bearing in mind that sometimes gold, for example, is added, and sometimes it is not? Is an XI EORI required?

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By steve.oldham
16th Dec 2020 09:57

What about B2C sales of goods from GB to NI? From a VAT perspective it's domestic, so charge the appropriate UK rate, nothing changes. But what about the subsequent shipment of the goods? Is that also a purely domestic concern because it's B2C? Or do the entry summary, no duty unless "at risk", and safety/security declarations still apply?

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