VATNIEU3600 - Supply and acquisition: goods acquired by and from non-taxable persons
Goods received in Northern Ireland by non-registered purchasers.
When somebody in Northern Ireland who is not registered for VAT acquires goods from an EU member state, they will normally be charged domestic VAT in the member state from which the goods are dispatched (but see VATNIEU3700 for information about distance selling).
However, under paragraph 2(3)(a)(ii) of schedule 9ZA VATA 94, a non-taxable legal person (that is somebody who is not registered for VAT but excluding private individuals), may be subject to acquisition VAT.
2(3) An acquisition of goods from a member state falls within this subparagraph if:
(a) the goods are acquired in the course or furtherance of:
(ii) any activities carried on otherwise than by way of business by any body corporate or by any club, association, organisation, or other unincorporated body,
This arises if the value of goods acquired from member states exceeds the UK registration threshold for acquisitions. In that event, the person may be required to register for VAT in the UK on the value of those purchases alone and account for acquisition VAT in the normal way.
Non-taxable legal persons include public bodies, organisations, institutions, charities and even individuals if they are not acting in a purely personal capacity. Unlike the normal VAT registration threshold, which is based on taxable turnover, the acquisition threshold is based on acquisitions made in Northern Ireland in a calendar year from 1 January to 31 December. A non-taxable legal person may therefore become liable to register at any time as soon as the threshold is exceeded. For more information about this see the manual covering registration (VATREG).
Goods purchased from non-registered suppliers in an EU member state.
Under paragraph 2(3)(c) of schedule 9ZA VATA 94, a supply can only create a taxable acquisition in Northern Ireland if the supplier is registered for VAT in the member state of departure of the goods. No acquisition tax is therefore due on goods supplied by an unregistered person in an EU member state.
2(3) An acquisition of goods from a member state falls within this subparagraph if:
(c) the supplier:
(i) is taxable in a member state at the time of the transaction in pursuance of which the goods are acquired, and
(ii) in participating in that transaction, acts in the course or furtherance of a business carried on by the supplier.