No deal Brexit VAT Implications for Irish Business
Updated: Apr 17, 2020
If the UK leaves the EU without a deal this will have implications on the VAT treatment on supplies of goods and services between Ireland and the UK. If you are an Irish business and import or export from or to the UK you should be mindful that there will be some changes to way VAT is charged and how you report it to Revenue.
As there is a lot of uncertainty around the UK leaving the government has not yet issued specific guidance. We have put together some pointers on the VAT implications for businesses dealing with the UK as a third country. These points are intended for VAT registered businesses operating in Ireland and of course will not relevant if a deal is struck or contrary guidance is issued by the government.
As the UK will no longer be in the EU you should no longer include purchases from the UK as EU purchases. This will impact the way you fill in your VAT3 form as UK imports will no longer be included as EU imports.
UK suppliers should zero rate sales so there should not be VAT on the invoice you receive. If this is not the case we would recommend going back to your supplier to have the invoice adjusted.
VAT is charged on non-EU imports when the goods enter Ireland. This means that VAT will be added at the relevant rate when entering Ireland. This will result in a massive administrative burden for the Irish government and we are unclear as to how this will work in practice at this time. If the goods you are importing are exempt then they will not attract VAT on import.
You will need to register for an EORI number (Economic Operators’ Registration and Identification). This is an EU wide number and you can use when you interact with customs authorities in an EU member state. You should register for this via ROS or Myenquiries if you do not use ROS. See Revenue website for more info.
Businesses exporting to the UK will generally not need to charge VAT on sales of goods to UK based businesses. You may however need to keep some evidence on file to evidence compliance with VAT legislation. It is recommended you obtain the following at a minimum:
proof as to the place of establishment of the customer outside the EU.
proof that the customer is a taxable person. For example; sufficient evidence from your customer to show that he or she is a taxable person.
It can be more difficult to gather this information if your customer is a non-business customer. It is important that you obtain proof that your customer is established outside the EU. Failing to do so means you will become liable to Irish VAT.
At the time of writing there is still significant uncertainty surrounding Brexit and little guidance offered by the government. These points will be superseded by any such guidance issued. If you would like further information about the VAT Services we provide to clients contact us using the form below.