Charging VAT on goods dispatched from Northern Ireland to the EU

Guide

Last updated: 15 August 2024

If you sell, supply or transfer goods out of the UK to someone in an EU country, you may need to charge VAT. You can zero-rate most supplies sent from Northern Ireland to someone who’s registered for VAT in an EU country.

Sales from Northern Ireland to a country inside the EU are called ‘dispatches’ rather than ‘exports’.

Find out what you need to do if you’re exporting goods from either Great Britain to any destination outside the UK, or from Northern Ireland to a destination outside the UK and EU.

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 all the following apply:

  • you send the goods 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 dispatch the goods and get evidence of removal within 3 months of dispatch

To account for the VAT on zero-rated sales to an EU country, include the value of the supply in your VAT Return.

You can use an online interactive tool on the European Commission website to check if a VAT number for an EU country is valid.

To confirm the details a new customer has given you, contact VAT: general enquiries.

Evidence of removal

Evidence of removal shows that the goods have left the UK. Your evidence of removal could include:

  • 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 this evidence for 6 years. HMRC can ask to see it at any time during those 6 years. If HMRC are not satisfied with your evidence, 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.

For more information about evidence of removal, read VAT Notice 725.

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 the goods when they need them. Until that happens, you’re still considered the owner of the goods.

There are special easement rules available for call-off stock. You can defer the dispatch and acquisition for up to a year, or until the customer calls for the goods, whichever is earlier. For more information about these rules and their conditions, read VAT Notice 725.

If you cannot use the call-off stock easement rules, because you or your customer do not meet the conditions, 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. You’ll have to account for VAT in that country, so you must register there. Contact the tax authority of the EU country you’re sending the goods to for help.

Details of contact addresses and other useful information provided by the VAT authorities in other EU countries are available on the European Commission website.

How to report zero-rated EU sales

If you’re a UK registered trader, trading in Northern Ireland, you must:

  • tell HMRC about this
  • send lists of your EU sales to HMRC

You have to tell HMRC about zero-rated EU sales on 3 forms:

Sales to someone who is not VAT-registered in an EU country

If you sell goods to someone in an EU country who is not VAT-registered, this is called a ‘distance sale’. The most common examples are mail order or internet sales, to private individuals in an EU country.

From 1 July 2021, the EU-wide threshold  for distance sales of goods is £8,818 (10,000 euros) in a calendar year.

If you make distance sales from Northern Ireland, you should charge UK VAT, until either of the following happen.

The total value of your sales on these goods goes over the distance selling threshold

If the total value of your sales on these goods goes over the distance selling threshold, you must either:

  • register and account for VAT in all of the EU countries where you sell goods
  • use the One Stop Shop Union scheme to help you manage VAT on all your distance sales in one place

You choose to register and account for VAT in the EU countries you sell goods to

If the value of your sales is below the distance selling threshold, you can still choose to register and account for VAT in the EU countries where you sell goods. You must tell VAT: general enquiries in writing that you’re going to do this.

Transferring your own goods to an EU country

You can transfer your own goods to an EU country, whether this is to another part of your organisation, or to put into storage. HMRC treat this as if you’d made:

  • a supply in the UK
  • 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 the goods. In this 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. This means you would need to register for VAT there.

Excise goods

If you supply excise goods that excise duty is payable on, like alcohol or tobacco, to someone who is not registered for VAT in an EU country, the VAT due depends on whether:

  • you delivered them
  • your customer collected them

If you deliver the goods (or have someone else deliver them), they’re treated as distance sales in the country you deliver them to. You must register for VAT there, no matter the value of the sales.

If the unregistered customer collects them, you should 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, you must:

  • include the value of the sales in box 1 and box 6 on your VAT Return
  • pay HMRC any VAT you’ve charged in the usual way

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 will 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’ll need 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 lets customers account for the VAT under a reverse charge procedure. You’ll need to check with the VAT office in the destination country for more details.

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.

You’ll need to operate the reverse charge procedure when the goods come back. This means that you charge yourself VAT, 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
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