VAT on goods between Great Britain, Northern Ireland and the EU

The XI prefix

A business trading goods between Northern Ireland and EU member states must tell HMRC that it is trading under the Windsor Framework (GOV.UK). It then uses the XI prefix before its 9-digit UK VAT number when dealing with EU customers and suppliers.

GOV.UK's GB and NI guidance says Northern Ireland maintains alignment with the EU VAT rules for goods while remaining part of the UK's VAT system.

Goods between Great Britain and Northern Ireland

• Sales of goods either way between Great Britain and Northern Ireland are charged VAT by the seller, shown on the invoice and accounted for as output VAT on the return (GOV.UK).
• The customer reclaims that VAT as input tax using the invoice, under the normal rules.
• A VAT-registered business moving its own goods from Great Britain into Northern Ireland must account for VAT on the movement, and may reclaim it as input tax if it uses the goods for taxable sales.
• Moving own goods from Northern Ireland to Great Britain needs no VAT accounting unless the goods have been subject to a sale or supply.

Dispatches from Northern Ireland to the EU

1. Get the customer's VAT number

   Obtain the EU customer's VAT number in writing and check it (GOV.UK). The guidance points to the EU's checking service or the VAT general enquiries helpline.

2. Zero-rate the supply

   A supply of goods to a VAT-registered EU customer that meets the conditions is zero-rated.

3. Complete the return

   Put the value of the supply in box 6 and box 8.

4. Report the sale

   Include the customer's VAT number and the sale on an EC Sales List.

Acquisitions from the EU into Northern Ireland

• Box 2: acquisition VAT on goods that would be positive-rated in the UK (GOV.UK).
• Box 4: the same VAT reclaimed as input tax, under the normal rules.
• Boxes 7 and 9: the value of the acquisitions.
• The tax point for an acquisition is the earlier of the invoice date or the 15th of the month after the goods arrived (VAT Notice 700/12).
• Related costs such as packing, transport and insurance are included in box 2.

A worked example

For example, a Belfast wholesaler buys £8,000 of standard-rated goods from a supplier in Dublin, which zero-rates the sale to the wholesaler's XI number. The wholesaler enters £1,600 acquisition VAT in box 2, £1,600 in box 4, and £8,000 in boxes 7 and 9 (GOV.UK).

The same wholesaler sells £5,000 of goods to a VAT-registered customer in France. It zero-rates the sale, enters £5,000 in boxes 6 and 8, and lists it on its EC Sales List.

A movement of own goods

For example, a Great Britain manufacturer moves £15,000 of its own standard-rated stock to its depot in Northern Ireland. GOV.UK says VAT is due on the movement, so the business accounts for £3,000 as output VAT. If the goods are for taxable sales, it reclaims the £3,000 as input tax under the normal rules.

When the depot later sends unsold stock back to Great Britain, the business does not account for VAT on that movement, because the goods have not been the subject of a sale or supply.

Distance sales from Northern Ireland to EU consumers

Sales of goods from Northern Ireland to consumers in the EU are subject to a pan-EU threshold of £8,818 (€10,000) a year (GOV.UK). Over that threshold the business must either register in each EU member state where it sells or use the One Stop Shop to report the VAT due.

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