Dispatches of goods from Northern Ireland to the EU, and charging VAT
Find out if VAT is due when you sell, supply or transfer goods from Northern Ireland to the EU.
Overview
If you sell, supply or transfer goods out of the UK to someone in an EU country you may need to charge VAT on them. You can zero rate most supplies sent from Northern Ireland to someone who’s registered for VAT in an EU country.
Find out what you need to do if you are exporting goods from Great Britain to any destination outside the UK or Northern Ireland to a destination outside the UK and EU.
If you sell goods to someone in an EU country, who is not VAT-registered, that is a “distance sale”, you may be liable to VAT register in the destination Member State. If you are not liable and do not register voluntarily then you charge UK VAT in the normal way.
Sales from Northern Ireland to a country inside the EU are called ‘dispatches’ rather than ‘exports’.
Sales to someone who is VAT-registered in an EU country
If you’re sending goods to someone who is VAT-registered in a destination EU country, you can zero rate the supply for VAT purposes, as long as:
- the goods are sent out of the UK from Northern Ireland to an EU country
- whoever you’re sending them to is VAT-registered in an EU country
- you get their VAT registration number, including the 2 letter country code, and show it on your sales invoice
- you’ve got ‘evidence of removal’ showing that the goods have gone out of the UK
- you dispatch the goods and get evidence of removal within 3 months
To account for the VAT on zero-rated sales to an EU country, include the value of the supply in your VAT Return.
Your ‘evidence of removal’ will include a number of things like:
- customer orders
- correspondence with customers
- sales invoices
- packing lists
- invoices from hauliers
- bank statements
- consignment notes showing the goods have been received in an EU country
It must also show:
- your business details
- your customer’s details
- a detailed description of the goods and their value
- the method of transport and route
- where the goods are going to
You must keep evidence for 6 years. HMRC can ask to see it and if we think it’s unsatisfactory you may have to pay VAT on the goods or services you sold. If you cannot get this evidence in time you must account for VAT on your return.
You can use an online interactive tool to check if a VAT number for an EU country is valid. To confirm the details you’ve been given by a new customer, you should contact the VAT Helpline.
Call-off stocks
Call-off stocks are goods that you dispatch from Northern Ireland to an EU country, and keep in storage ready for a particular customer in that country. The customer only calls for them (‘call-off’) when the goods are needed, and until this happens, you’re still considered the owner of the goods.
There are special rules available for call-off stock whereby the dispatch and acquisition can be deferred for up to a year or until the goods are called off (whichever’s earlier). Notice 725 explains the rules.
If the conditions to operate the call-off stock easement are not in place then you should treat the goods as consignment stock.
Consignment stocks
Consignment stocks are goods you dispatch to an EU country without an identified customer where they’re held in storage before being sold.
Consignment stocks are treated as a movement of own goods followed by a supply in the EU country that they’re sent to. The movement can be zero-rated (as long as you meet all the usual conditions) and you will have to account for VAT in that country, and so must register there. Contact the tax authority in that country to check.
Details of contact addresses and other useful information provided by the VAT authorities in other member states can be found on the European Commission website.
How to report zero-rated EU sales
All UK registered traders trading in Northern Ireland will need to tell HMRC and have to send lists of their EU sales to HMRC.
You have to tell us about zero-rated EU sales on 3 different forms:
- your normal VAT Return in box 6 and box 8
- the EC Sales List (ESL)
- the Intrastat Supplementary Declaration, if you sell over £250,000 of goods to EU customers in a year
We’ll send you the ESL automatically if you’ve completed box 8 on your VAT Return.
Sales in an EU country to someone who is not VAT-registered
If you supply goods to a customer in an EU country who is not registered for VAT in that country and you’re responsible for delivery, this is a ‘distance sale’. The most common examples are mail order or internet sales to private individuals in an EU country. Distance sales are taxable as a domestic sale in Northern Ireland unless you become VAT registered in the destination country, either voluntarily or because you have exceeded the threshold (either €35,000 or € 100,000 (or currency equivalent)). You include the sale in your VAT Return for the period when the tax point takes place.
When you must register for VAT in EU countries
For distance sales, you must charge VAT at UK rates in the normal way. But each country has a ‘distance selling threshold’. If the value of your sales to that country is over this limit, you must register for VAT in that country, and charge their rate of VAT on sales to consumers in that country. You may voluntarily make the place of supply that other country if you notify HMRC of your intention to do so.
Transferring you own goods to an EU country.
If you transfer your own goods to an EU country, whether to another part of your organisation or to put in storage, we treat this as if you’d made a supply in the UK and an acquisition in the destination country.
You may have to account for UK VAT unless you’re also registered for VAT in the EU country where you send them, in which case you can zero-rate them as long as you meet all the usual conditions. You may also have to account for acquisition VAT in that country, and so have to register there.
Excise goods
If you supply excise goods (that is, goods that excise duty is payable on, such as alcohol or tobacco) to someone who is not registered for VAT in an EU country, the VAT due depends on whether you delivered them or your customer collected them.
If you deliver the goods (or arrange for them to be delivered), they’re treated as distance sales in the country you deliver them to, and you must register for VAT there no matter the value of the sales. If the un registered customer collects them you charge UK VAT in the normal way.
How to report EU sales where you’ve charged VAT
If you’ve made EU sales that are treated as domestic supplies and you’ve charged VAT, include the value of the sales in box 1 and box 6 on your return, and pay HMRC any VAT you’ve charged in the usual way. You’ll not have to report these sales on an ESL.
But you’ll have to complete an Intrastat Supplementary Declaration if your sales to EU customers are more than £250,000 worth of goods in a year.
Temporary movements of goods to an EU country
You may have to send goods to an EU country so you can do a job there. These are called ‘temporary movements’. You’ll not have to account for VAT on these goods if all of the following apply:
- you do not have a place of business in the EU country where you’ve sent the goods
- you’ve got a contract to carry out in that country and need the goods for that contract
- you intend to return the goods to the UK when the contract is finished
- you keep evidence that the goods have left the UK and returned
- you keep a register of temporary movements to EU countries
Installing or assembling goods in an EU country
You might have a contract to supply goods that you’ve got to install or assemble on site. When this happens, your supply takes place in the country where you install or assemble the items. You might have to register for VAT in that country. Some EU countries have a simplified system that allows your customer to account for the VAT under a reverse charge procedure; you’ll need to check with the VAT office in that country how it works.
Send goods to an EU country for repair or processing
If you send goods to an EU country for repair or processing, you do not make a sale, so you do not need to charge VAT. The EU repairer or processor will not charge you VAT for their work if you’re registered for VAT in the UK. But you have to operate the ‘reverse charge procedure’ when the goods come back, you charge yourself VAT, and then reclaim it in the normal way. There’s no net effect unless you have a restricted input tax recovery rate.
You’ll also have to:
- keep a record of the temporary movement of goods
- fill in the Intrastat Supplementary Declaration for the dispatch and return of the goods