News added on 09.12.2020

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Draft legislation on post-Brexit Northern Ireland goods movement published

The government has introduced the draft legislation that will govern the way VAT, customs and excise duty will work following 31 December 2020. What are the key points?

Taxation Bill. After the end of the transitional period on 31 December 2020, Northern Ireland (NI) will have a dual position. It will not be an EU member, but will continue to follow EU Customs Union, Single Market, and VAT rules. This had already been agreed in principle under the withdrawal agreement and NI protocol. The new Taxation (Post-transition Period) Bill  will implement important aspects of the protocol accordingly. One of the key parts of the bill will ensure that EU goods that are imported into NI from the Republic of Ireland will not be subject to checks or customs duties. In terms of movement of non-domestic goods between Great Britain and NI, customs duty may apply if the goods are “at risk” of subsequently being moved into the EU. In terms of VAT, the current system will continue to apply. However, businesses must inform HMRC now if they are trading in NI to permit this to continue.

Use the online form to tell HMRC that you are an NI trader if you are VAT registered, and any of the following apply:

  • your goods are located in Northern Ireland at the time of sale;
  • you receive goods in Northern Ireland from VAT-registered EU businesses for business purposes;
  • you sell or move goods from Northern Ireland to an EU member state.

Record keeping. From 1 January 2021, any NI VAT-registered business trading with an EU supplier will need to use “XI” as a prefix to their VAT number, i.e. instead of GB. You will also need to complete an EC Sales List if you are selling to VAT-registered customers in the EU. Further guidance should be expected once the Bill is passed into law. Of course, until the final position is known this is still subject to further change over the next few weeks

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