Changes in VAT for Irish businesses doing Business in the United Kingdom

The agreement’s basic strokes are that the laws of commerce with a non-EU nation (referred to by Revenue as a “third country”) now apply to any trade (goods or services) with the United Kingdom. Northern Ireland, which is part of the United Kingdom but not Great Britain, has its own set of rules: it will continue to be considered as a European member state in terms of goods VAT, but as a non-EU nation in terms of services VAT.

If a client asks us a simple question if we’re an Irish company selling a service in the UK, do we need to register for UK VAT? – you’d think we’d be able to respond with a simple Yes/No. Unfortunately, there isn’t one. Many factors will play a role in this scenario, including:

Any firm that decides to register for VAT in the United Kingdom will face consequences. You’ll be adding extra administration to the firm overnight, having to perform more bookkeeping, and filing twice instead of once. For filing purposes in the United Kingdom, you’ll require an accounting system that links to HMRC. However, the implications of continuing as if nothing has changed are severe. If you get it wrong, you might end up having to refund back 20% of your UK earnings in a year since you weren’t registered for VAT in the first place.

In the area of Brexit, Enterprise Ireland is doing a lot of action. They’ve started a new initiative called Evolve UK, which will provide crucial insights to Irish firms on the changing UK market and industry changes/opportunities through publications, briefings/bulletins, and virtual events, all of which will be managed by their UK-based staff. The Evolve Strategic Planning Grant, which is part of this campaign, is aimed to help clients navigate the changing trade climate in the UK. This €5,000 award assists businesses in adapting their market strategy in order to secure and expand revenues.

E-Commerce retailers based in the EU who make sales online EU Customers are required to follow distance selling rules. There are certain thresholds at present for each EU country. Once the retailer exceeds the threshold for the customer’s country, he must then switch to the domestic tax rate of that country and ensure you are VAT registered in that member state.

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We’ll put together a team of professional accountants in Ireland with international experience to assist you with bookkeeping, periodic financial statements, cash flow statements, and reconciliations.

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