In May during a HMRC webinar hosted by the Ulster Society on VAT post-EU exit, a query was raised, the answer to which is provided below together with a further answer to a query recently raised by the Institute on behalf of members.

“Q: For goods moving EU – NI – GB – are Irish export and UK import documents required?

A: The following below sets out when declarations are needed for goods moved EU-NI-GB.

https://www.gov.uk/guidance/moving-qualifying-goods-from-northern-ireland-to-the-rest-of-the-uk

Q: Where an ROI business (with no other connection to NI/UK) supplies services to a NI registered business based in NI, do they need to register for UK VAT as a Non-established-taxable-person which would be quite administratively burdensome?

A: It’s the below in Section 8 VATA 1994 that decides this. The services are regarded as made by the recipient. That is why the recipient can be forced to register for these purchases. The overseas supplier will never be registerable, as a result of a) below.

If the services were B2C, then the services would be supplied abroad, so no-one accounts for any VAT.

Due the final line below, highlighted, the breadth of services whereby the supplies by overseas businesses is accountable by a UK established recipient, is very broad. In the case of those services, the recipient must be VAT registered as well as established in the UK.

Legislation

8(1) Where services are supplied by a person who belongs in a country other than the United Kingdom in circumstances in which this subsection applies, this Act has effect as if (instead of there being a supply of the services by that person)–

1. there were a supply of the services by the recipient in the United Kingdom in the course or furtherance of a business carried on by the recipient, and
2. that supply were a taxable supply.

8(2) Subsection (1) above applies if–

1. the recipient is a relevant business person who belongs in the United Kingdom, and
2. the place of supply of the services is inside the United Kingdom,

and, where the supply of the services is one to which any paragraph of Part 1 or 2 of Schedule 4A applies, the recipient is registered under this Act.

In this scenario, the services received by the NI business must be added to its taxable turnover, which will be required to register for VAT if this results in the registration threshold being exceeded.”