Simple Guide to Cross Border Trade

192 Matching Results

Buying Products from Ireland

  • Are there any Customs issues to be aware of?

    There is free movement of goods within the EU and the only goods which need to be declared at Customs are excisable goods i.e. tobacco, spirits, wines and beer.

    However, this may change when the UK leave the EU on 29 March 2019.

  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • How do I pay my supplier?

    The simplest and most cost effective way of effecting payment to suppliers is usually to write a foreign currency cheque. As the use of cheques is being phased out most suppliers prefer to be paid by Bacs or debit / credit card. This is where having a foreign currency account really comes into its own as it avoids having to arrange electronic transfers or the purchase of a draft from your bank. The foreign currency account can be either funded by currency receipts or periodic currency purchases from your bank. Currency purchases can usually be made by telephone or internet dealing.

    Read More
  • What currency should I pay my supplier in?

    There is no definitive answer to this as individual circumstances differ. However, you should endeavour to pay in the currency most suitable to your needs and agree a payment currency with your supplier accordingly.

    Read More
  • Is it worthwhile opening a euro account?

    Where you are making and receiving euro payments it is often advantageous to maintain a euro bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices) thus the fewer deals you do the less ‘spread’ you pay.

    Read More
  • How do I open a euro account?

    The most convenient way to open a euro account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    Read More
  • Who is responsible for VAT?

    If you are VAT registered in the UK and you are purchasing goods from an Irish VAT registered person and the goods are to be dispatched to you in the UK, the supplier will take a note of your VAT number and business address and will then zero rate the supply of goods to you.

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  • When do I assume the risk for the goods?

    In the absence of a written contract stating something different, where the seller arranges delivery to the purchaser risk will only pass on receipt of delivery of the goods. In certain circumstances where the seller arranges delivery to the buyer risk may only pass to the buyer on receipt of delivery. In a cross border sale, this may therefore mean that risk would only pass to the buyer when he receives the goods in Northern Ireland. It would be to the buyers benefit if risk only passed to him on receipt of the goods in Northern Ireland. For example, if risk passed to the buyer on collection of the goods in Ireland and the goods were damaged in transit in Ireland, then the buyer would be obliged to ensure that he was properly insured for transit of those goods. Often, the Contract will define at which point risk passes. A seller (who generally draws up the Contract) will however want to ensure that risk passes at the earliest point. Therefore, a buyer should ensure to read the Contract of Sale carefully.

  • What if the goods turn out to be defective and the vendor will not repair/replace?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business.

    However, some modifications to the general law standards are allowable in written business-to-business contracts. If the goods are defective, and (in a business-to-business context) in the absence of any explicit provisions dealing with this in a written contract, because the sale will have occurred within Ireland, in the normal course the buyer will sue the seller in the Republic of Ireland Courts; i.e. where the contract occurred.

    Even if the contract occurred in Northern Ireland (e.g. where the seller from Ireland sold the products in Northern Ireland through a Sales Agent in Northern Ireland) it may still be more appropriate to sue the seller in Ireland as it would be easier to enforce an Irish judgment against an Irish seller. There are however circumstances where it may only be possible to issue proceedings in Northern Ireland where witnesses in Northern Ireland are not compellable to attend Courts in Ireland to prove the circumstances of the contract.

Buying Products from Northern Ireland

  • Are there any Customs issues to be aware of?

    There is free movement of goods within the EU and the only goods which need to be declared at Customs are excisable goods e.g. tobacco, spirits, wines and beer.

    However, this may change when the UK leave the EU on 29 March 2019.

    Also please note that excisable goods are imported by appointing a Registered Consignee.

  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • How do I pay my supplier?

    The simplest and most cost effective way of effecting payment to suppliers is usually:

    • To write a foreign currency cheque. However, as the use of cheques is being phased out.
    • A lot of suppliers prefer payment to be made by Bacs or alternatively debit / credit card. This is where having a foreign currency account really comes into its own as it avoids having to arrange electronic transfers or the purchase of a draft from your bank. The foreign currency account can be either funded by currency receipts or periodic currency purchases from your bank. Currency purchases can usually be made by telephone or internet dealing.
    • Banks will sell foreign currency drafts to their clients, however these offer little advantage from the purchaser’s perspective other than an ability to make payment when no foreign currency account exists, i.e. for one off transactions. A fee is usually payable for the purchase of a draft.
    • The most secure payment method is an electronic bank–to-bank transfer. Whilst normally more expensive than the previous methods above it provides cleared funds to the recipient at a known value date and ensures safe receipt. This is especially useful where goods are dispatched upon receipt of payment.
  • What currency should I pay my supplier in?

    There is no definitive answer to this as individual circumstances differ. However, you should endeavour to pay in the currency most suitable to your needs and reach agreement with your supplier accordingly.

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  • Is it worthwhile opening a Sterling account?

    Where you are making and receiving Sterling payments, it is often advantageous to maintain a Sterling bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices), so the fewer deals you do the less ‘spread’ you pay.

    Read More
  • How do I open a Sterling account?

    The most convenient way to open a Sterling account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    Read More
  • Who is responsible for VAT?

    If you are VAT registered in Ireland and you are purchasing goods from a UK VAT-registered person and the goods are to be dispatched to you in Ireland for the purposes of your trade, the UK entity will take a note of your VAT number and business address, which they must then verify with HM Revenue & Customs (HMRC). Once HMRC confirm the VAT details, the UK entity may zero rate the supply of goods to you.

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  • When do I assume the risk for the goods?

    Normally, in the absence of a written contract stating something different, where the seller arranges delivery to the purchaser, risk will only pass to the purchaser on receipt of delivery. In a cross-border sale, this may therefore mean that risk would only pass to the buyer when he receives the goods in Ireland. Often, the contract will define at which point risk passes. A seller (who generally draws up the contract) will however want to ensure that risk passes at the earliest point. Therefore, a buyer should ensure to read the Contract of Sale carefully and seek legal advice.

  • What if the goods turn out to be defective and the vendor will not repair/replace?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    Read More

Buying Services from Ireland

  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • How do I pay my supplier?

    The simplest and most cost effective way of effecting payment to suppliers is usually to write a foreign currency cheque. As the use of cheques is being phased out most suppliers prefer to be paid by Bacs or debit / credit card. This is where having a foreign currency account really comes into its own as it avoids having to arrange electronic transfers or the purchase of a draft from your bank. The foreign currency account can be either funded by currency receipts or periodic currency purchases from your bank. Currency purchases can usually be made by telephone or internet dealing.

    Read More
  • What currency should I pay my supplier in?

    There is no definitive answer to this as individual circumstances differ. However, you should endeavour to pay in the currency most suitable to your needs and agree a payment currency with your supplier accordingly.

    Read More
  • Is it worthwhile opening a Euro account?

    Where you are making and receiving Euro payments it is often advantageous to maintain a Euro bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices) thus the fewer deals you do the less ‘spread’ you pay.

    Read More
  • How do I open a Euro account?

    The most convenient way to open a Euro account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    Read More
  • Who is responsible for VAT?

    The rules relating to VAT on services are different (and more complex) than those relating to goods.

    Read More
  • What if the service is substandard?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    Read More
  • Is it necessary for the service provider in Ireland to have professional indemnity/trade insurance?

    Professional/Trade indemnity insurance is an insurance policy which provides indemnity to the Service Provider by their Insurance Company for Breach of Contract. That is, in the event that the service provider provides a substandard service by which the Service Receiver sustains loss, then the insurance company guarantees to pay any loss which the service receiver has suffered.

    While it is not compulsory in either jurisdiction that service providers have Professional Indemnity/trade Insurance, it is generally a requirement of membership of professional organisations that the service provider has Professional/Trade Indemnity Insurance. For example, just as a Solicitor in Northern Ireland (as a requirement of membership of the Northern Ireland Law Society) is required to have Professional Indemnity Insurance within Northern Ireland, a Solicitor in Ireland (as a requirement of membership of the Law Society of Ireland) is obliged to have Professional Indemnity Insurance within Ireland. If in doubt, you should request the service provider to confirm that he has Professional Indemnity Insurance for his services in the jurisdiction in which he provides those services.

    If the Irish service provider is providing those services in Northern Ireland, then it is important to ascertain that the Irish service provider has professional indemnity to provide services in Northern Ireland.

Buying Services from Northern Ireland

  • Is it necessary for the service provider in Northern Ireland to have professional/trade indemnity insurance?

    While it is not compulsory in either jurisdiction that service providers have Professional/Trade Indemnity Insurance, it is generally a requirement of membership of professional organisations. For example, just as a Solicitor in Ireland (as a requirement of membership of the Law Society of Ireland) is required to have Professional Indemnity Insurance within Ireland, a Solicitor in Northern Ireland (as a requirement of membership of the Northern Ireland Law Society) is obliged to have Professional Indemnity Insurance in Northern Ireland.

    If in doubt, you should request the service provider to confirm that he has Professional Indemnity Insurance for his services in the jurisdiction in which he provides those services. If the Northern Ireland service provider is providing those services in Ireland, then it is important to ascertain that the Northern Ireland service provider has professional indemnity to provide services in Ireland

  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • How do I pay my supplier?

    The simplest and most cost effective way of effecting payment to suppliers is usually to write a foreign currency cheque. However, as the use of cheques is being phased out a lot of suppliers prefer payment to be made by Bacs or debit /credit card. This is where having a foreign currency account really comes into its own as it avoids having to arrange electronic transfers or the purchase of a draft from your bank. The foreign currency account can be either funded by currency receipts or periodic currency purchases from your bank. Currency purchases can usually be made by telephone or internet dealing.

    Read More
  • What currency should I pay my supplier in?

    There is no definitive answer to this as individual circumstances differ. However, you should endeavour to pay in the currency most suitable to your needs and negotiate with the supplier accordingly.

    Read More
  • Is it worthwhile opening a Sterling account?

    Where you are making and receiving Sterling payments, it is often advantageous to maintain a Sterling bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices), so the fewer deals you do the less ‘spread’ you pay.

    Read More
  • How do I open a Sterling account?

    The most convenient way to open a Sterling account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    Read More
  • Who is responsible for VAT?

    The rules relating to VAT on services are different (and more complex) than those relating to goods.

    Read More
  • What if the service is substandard?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    Read More

Cross-Border Distributorships or Agencies

  • What is the difference between a distributor and an agent?

    In a distributorship a supplier or manufacturer sells his products to the distributor, who in turn sells the products on to his customers, adding a margin to cover his own costs. Distributorships are used as a low risk means of expanding business into new markets or territories.

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  • What are the advantages are disadvantages of each?

    Advantages of a Distributorship

    • A supplier is able to pass on risk associated with the products.
    • The distributor is motivated to sell the stock purchased from the supplier.
    • A supplier will not incur any liability as a result of the distributor’s activities (although the supplier may remain liable for defective products).
    • The appointment of a distributor will avoid the need for a supplier requiring an established place of business in the territory, reducing administrative costs.
    • A supplier will only need to monitor accounts with a distributor.
    • No compensation is automatically payable to a distributor upon termination of the distributorship agreement.
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  • What should we cover in an agency contract?
    • Duty of agent to comply with reasonable instructions from his principal
    • Duty of agent to communicate necessary information to his principal
    • Duty of principal to provide his agent with the information necessary for the performance of the agency contract.
    • Remuneration of agent – entitlement to commission
    • Termination provisions
    • Consequences of termination
    • Agreement to supply product
    • Clear order and delivery procedures
    • Minimum sales and targets
    • Competition and restraint of trade – the principal may wish to prevent the sales agent from selling similar products on behalf of other competitors which compete with the contract products for a period after termination of the agreement.

    Legal advice should be sought in drafting any agency contracts.

  • What should we cover in a distributorship contract?

    It is probably helpful first to explain that there are different types of Distributorships; namely an Exclusive Distributorship, a Sole Distributorship, a Non-Exclusive Distributorship and a Selective Distributorship.

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  • Are there any tax issues to look out for?

    Specific professional advice should be sought regarding your detailed circumstances as this subject is much too complicated to be covered in the context of this publication.

Establishing a presence in Ireland

  • Are there any advantages to my establishing a presence in Ireland?

    Yes, the rate of corporation tax for trading companies is an advantage and can produce a tax saving where you choose to form a subsidiary or a separate limited company. Formation of a branch will not result in the same saving. However, pricing rules should be considered when exploring tax-saving opportunities.

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  • Are there any disadvantages to my establishing a presence in Ireland?

    A Northern Ireland business person deciding to establish a presence in Ireland will go through almost the very same business start-up expenses which he would have originally encountered when establishing his initial presence in Northern Ireland. For example, it will be necessary to take on the expense of a lease/purchase of premises, building insurance, electricity, telephone supply, payment of commercial rates and other related expenses. For assistance to “start-ups” within Ireland, contact a City/County Enterprise Board or look at their SME online tool on their website www.localenterprise.ie

  • What’s the difference between a branch and a subsidiary?

    Whereas a branch is an extension of a company, a subsidiary is a legal entity in its own right. In the UK the term branch has been superseded by the term “permanent establishment”

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  • What formalities must we undertake?

    It will be necessary to decide whether you propose to trade as a Sole Trader/Partnership or as a Limited Liability Company.

    Branches of a UK company must be registered with the Companies Registration Office. The registration must take place within one month of setting up the branch, by submitting a Form 12 along with the necessary documentation. For more details, please refer to information leaflet no 5 registration of external companies at www.cro.ie.

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  • Can we be taxed twice?

    For branches there is a tax charge where the branch is located and a tax charge where the main company is located but double taxation relief also comes into play. Under the UK tax legislation. UK resident companies can elect to have all their foreign branch profits exempt from UK Corporation Tax. This is an irrevocable election. This proposal aligns the tax treatment of foreign branches with those of foreign subsidiaries.

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Establishing a presence in Northern Ireland

  • Are there any advantages when establishing a presence in Northern Ireland?

    The issue of establishing a presence in the other jurisdiction is generally more relevant to service providers rather than to sellers of goods. Sellers of goods can manufacture or procure their products within Ireland and establish a satisfactory means of delivery of those goods into Northern Ireland. The goods may be sold through shops within Northern Ireland and therefore the origin of the manufacture of those goods is not that important. However, a service provider will be providing a personal service and, as such, his presence and identity to the client may be considered more important.

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  • Are there any disadvantages when establishing a presence in Northern Ireland?

    An Irish business person deciding to establish a presence in Northern Ireland will go through almost the very same business start-up expenses which he would have originally encountered when establishing his initial presence in Ireland. For example, it will be necessary to take on the expense of a lease/purchase of premises, building insurance, electricity, telephone supply, payment of commercial rates and other related expenses. For assistance on “start-ups” within Northern Ireland, visit Enterprise Northern Ireland at www.enterpriseni.com, Invest Northern Ireland at www.investni.com or Department for the Economy, at www.economy-ni.gov.uk.

    Read More
  • Should I open a branch or a subsidiary?

    A branch is an extension of a company, whereas a subsidiary is a legal entity in its own right. In the UK, the term branch has been superseded by the term “permanent establishment”.

    Read More
  • What formalities must we undertake?

    It will be necessary to decide whether you propose to trade as a Sole Trader/Partnership or as a Limited Liability Company in Northern Ireland.

    Read More
  • Tax considerations

    From a company law perspective, if you set-up a NewCo in Northern Ireland as a subsidiary of your Irish company, the Irish company may lose its entitlement to audit exemption (assuming it was audit exempt prior to this) as the Irish company is now part of a “group” for company law purposes.

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  • Can we be taxed twice?

    If a UK subsidiary is formed its profits will be liable to corporation tax in the UK. If a permanent establishment (or branch) is formed, the profits of that establishment will be taxed in the UK2, but will also be liable to tax in Ireland. However, double taxation relief will be given in respect of the element of profits taxed twice.

Exploring a Cross-Border Joint Venture

  • What are the options in terms of co-operation structures?

    The type of co-operation structure or Joint Venture vehicle that should be used in any set of circumstances will usually fall to be decided on the basis of how much risk each party is willing to assume for the Venture, the likely period of the joint venture and whether the proposed structure is tax efficient.

    The main types of joint venture vehicles are as follows:

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  • What contracts or documents are required?

    It is of fundamental importance to have a legal agreement put in place when there is a joint venture. It is absolutely critical to define at the outset the nature of the joint venture i.e. is it a Company, a Partnership or merely some form of Contractual Joint Venture. Obviously, this is critical from a tax viewpoint because each arrangement will be taxed differently. Of fundamental importance from a legal viewpoint is to provide for scenarios where there is a breakdown in the relationship between the Joint Venture parties or there is a dispute between them or how the Joint Venture is to be wound up in the future.

  • What law governs our contract?

    It would be normal for the Joint Venture Agreement to specify the law that will govern the agreement between the parties. It is a matter of negotiation between the parties to decide the law of which jurisdiction would be most appropriate to deal with matters of interpretation and/or dispute.

  • Are there any tax issues we should be aware of?

    The choice of Joint Venture vehicle will hugely impact on various taxes such as Corporation Tax, Income Tax and VAT. It is vital that tax advice is taken at the earliest possible opportunity. Before the Joint Venture arrangement is fully negotiated, detailed tax advice should have been taken by all parties.

Managing and Commercialising Your IP

  • Bankruptcy Proceedings (or liquidation of a company)

    As the terms of the UK’s withdrawal from the EU are not yet known, there is uncertainty as to the enforceability of certain intellectual property rights in the post-Brexit period. A specific commentary is provided against each IP type.

  • Identifying your IP

    Many businesses find it helpful having an IP strategy, focused on the identification of what IP is developed and used in their business, understanding its value and any fetters on its ownership. Below is a high-level overview of some of the main types of IP rights that are enforceable in the UK and Ireland.

  • Registered Trademarks

    A registered trademark is a sign that distinguishes the goods or services of one business from those of another. It must be distinctive and not be identical or similar to an earlier registered mark relating to identical or similar goods/services. There are two types of registered trade mark that are enforceable in the UK: (i) UK registered trademarks and (ii) community trademarks (EUTMs). An EUTM is a unitary right that is enforceable throughout all the member states of the EU. A EUTM is also enforceable in Ireland. However, in addition, there is a separate Irish trademark registration system under which you can register an Irish trade mark enforceable only in Ireland.

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  • Unregistered Trademarks

    In addition to the above protection for registered trademarks, there is also a form of protection in the UK and Ireland for unregistered trademark rights. Any goods or services sold in the UK or Ireland in the course of business will generate ‘goodwill’. In general terms, an Irish or UK court might assist the owner of goodwill which attaches to a part of their business in preventing a third party from selling goods or offering services in a manner that misleads consumers into believing the goods or services are those of the owner. This type of unlawful activity is called ‘passing off’ and the protection extends not only to trademarks but also to the get-up and overall ‘look and feel’ of a product. As the protection arises automatically through trading activities, no registration of rights is required.

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  • Patents

    A patent is a means of protecting an invention. For an invention to be patentable in the UK and Ireland, it must be:

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  • Copyright

    Copyright protection is given to original works and arises automatically upon their creation. Traditionally for a work to be an ‘original work’ the work must have originated from the author by his skill and labour. The amount of skill and labour required is fairly low and there is no need for the work to achieve any form of literary or artistic merit. The categories of works that are capable of being protected include literary works, dramatic works, musical works, artistic works, films and broadcasts. The works which are normally most relevant to commercial activities are literary works (which includes computer programmes, books, manuals and databases). Copyright permits the author of a work to object to (and in turn to have the exclusive rights) in relation to specific uses of a work, to include, reproduction (copying), making available, renting or lending, performing, communicating to the public and adapting. A third party who, without the author’s/copyright owner’s permission, undertakes any of these acts in respect of all or a “substantial part” of the work will infringe copyright in the work. Aside from these traditional exclusive rights of a copyright owner, an author also has “moral rights” with respect to a work.

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  • Registered Designs

    A UK registered design gives the owner the exclusive right to use the design in the UK. In order to obtain a valid registration, the applicant must have a design (being the appearance of the whole or part of a product), that is new, has individual character within the EU, and is not an excluded category. The application is filed with the UK Designs Registry, and can last for a maximum of 25 years from the filing date. In Ireland an owner of a design applies for registration to the Irish Patent Office. A design filed under the old statute can last for 15 years and a design filed under the new statute (Industrial Designs Act 2001 which covers all designs filed since 1st July 2002) can last for a maximum of 25 years as long as the renewal fees are paid.

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  • Unregistered Designs

    In the UK, the UK Unregistered Design Right (UDR) was introduced to provide a form of shorter term protection against the copying of ‘industrial designs’ than had previously been available under copyright. Design means any aspect of the shape or configuration of a product. For a design to qualify for UDR, it needs to be original and not be commonplace in the relevant design field. A further qualification for UDR is that of the designer, the person who commissioned the design or the country of first marketing must fall within a permitted list. This list includes all EU countries, but notably excludes countries such as the United States and Japan. UDR arises automatically upon the creation of the design, and remains enforceable for between 10-15 years from when first created or exploited. There are no national rights for unregistered designs in Ireland making the Community protection of these designs very important. Unregistered Community Design (UCD) does not require the owner to qualify by reference to nationality. UCD is a right that arises automatically and applies throughout all member states of the EU, thereby avoiding the need for separate infringement proceedings in each relevant country. UCD protects designs (being the appearance of the whole or part of a product) that are new, have individual character within the EU, have been made available to the public, and are not in an excluded category. UCD lasts for 3 years from the date on which the design is first made available to the public.

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  • Database Rights

    Databases can be protected in the UK by copyright law (as a literary work) provided that the database is a collection of independent works, data or other materials which (a) are arranged in a systematic or methodical way and (b) are individually accessible by electronic or other means. The test for database copyright is whether the database is, by reason of the selection or arrangement of the contents of the database, the author’s own intellectual creation. Generally speaking, this is considered by most to require a level of creative input on the part of the author that is akin to the usual copyright test that the author has inputted skill and labour into the work.

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  • Confidential Information

    In general terms the courts will act to prevent the confidential information of one party being used or disclosed by another party. For information to be classed as confidential, it must be something that is not in the public domain. If information is confidential, then it is important for the holder to treat it as such. Otherwise there is the risk that the courts will not assist the holder if a third party comes into possession of that information.

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  • Domain Names

    Although domain names are intangible assets, they are not, strictly speaking, an intellectual property right giving the holder a property right that can be enforced against third parties. A domain name registration derives from a contractual relationship with the domain name registry. Domain names are available on a “first come, first served” basis.

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  • Protecting and Enforcing your IP

    Once identified businesses should consider how to protect this IP including raising awareness amongst staff and where appropriate ensuring confidentiality. Consideration should be given to registration of the intellectual property (where appropriate) and being prepared to take enforcement action against infringers. Such enforcement action may include issuing proceedings against an alleged infringer in the courts of the relevant jurisdiction.

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  • Commercialising your IP

    The commercialisation of IP happens in a number of ways including:

    1. licensing of the IP to a third party or related entity on a royalty-bearing basis;
    2. assigning ownership of the IP to another entity for a lump sum (possibly with licence-back arrangements); and
    3. using the IP as a valuable asset to secure financing.
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Patent Box Tax Relief

  • Who can benefit from the Patent Box?

    You can only benefit from the Patent Box if your company is liable to Corporation Tax and makes a profit from exploiting patented inventions.

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  • Which patents are eligible and what must be done with them?

    You can benefit from the Patent Box if your company owns or exclusively licenses-in patents granted by the:

    • UK Intellectual Property Office
    • European Patent Office
    • following countries in the European Economic Area: Austria, Bulgaria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Poland, Portugal, Romania, Slovakia, and Sweden

    Your company or another group company must also have undertaken qualifying development for the patent by making a significant contribution to either:

    • the creation or development of the patented invention
    • a product incorporating the patented invention
  • Exclusively licensing-in patents

    Patent holders may wish to license their inventions for others to develop. If your company holds licenses to use others’ technology it may still be able to benefit from the Patent Box. But to do so it must meet all of the following conditions.

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  • Income earned from exploiting patented inventions

    Not all of your company profits may come from exploiting patented inventions. To be relevant IP (intellectual property) income, it must come from at least one of the following:

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  • How and when to claim

    You have to make an election to benefit from the reduced rate of Corporation Tax that applies to the Patent Box. You can do this in the computations accompanying your Company Tax Return or separately in writing. There is no special form of words for this election. You must make your election within two years after the end of the accounting period in which the relevant profits and income arose.

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Potential Implications of Brexit

  • Tariffs

    Tariffs are custom taxes that governments levy on imported goods. The tax can be unit based and/or a % of the cost of the product. In effect they raise the price of the imported good. WTO tariffs are the default tariffs if a trade agreement is not reached between the EU and the UK by April 2019. 5,200 product lines are registered with the WTO with tariffs ranging from 0% to 80%.

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  • Non-Tariff Barriers

    Non-tariff barriers result from policy measures other than tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, prices or both. They can be:

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  • Logistics and supply chains

    How goods are transported across the border may be impeded after Brexit. Reviewing logistics plans will help you to see where and how you may be affected. Supply, production and distribution networks may be affected in a number of ways post Brexit. Reviewing your supply chain will help you to identify your areas of supply chain risk.

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  • Progressive divergence between EU and UK Law

    It is the UK’s stated objective to repatriate its law-making powers from the EU, so whilst initially EU law will be transposed into UK law, inevitably over time UK law will commence diverging from EU law. This may have an impact on the following areas of commercial law:

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  • Will my service be able to access the EU post Brexit?

    In the absence of a free trade deal in services the General Agreement on Trade in Services (GATS) will apply. This is the first and only set of multilateral rules governing international trade in services. EU countries have their own schedules under the GATS.

    Check to see if the EU countries you trade with would continue to allow your services trade under GATS.

  • Can I continue to provide my service from the UK to EU customers and vice versa?

    Currently, customers may cross the border to receive a service from a service provider in the UK/Ireland, for example a tourism experience service. Your right to provide the service is unlikely to be affected, however consider how service demand from EU/UK customers may change post Brexit.

  • Can I continue to supply a service across the border?

    In cross-border service supply the supplier and customer are in different countries. The service is supplied across the border, for example a software development service. Under GATS the ability of service providers to supply a service within another EU country will vary by country and service sector.

    Consider how access to customers and contracts of supply may change post Brexit.

  • Rights of Establishment

    Currently the EU’s freedom of establishment guarantees mobility of businesses and professionals within the EU. The right of establishment will affect commercial presence rights.

    Do you have plans to establish a business within the EU or UK?

  • Will businesses still be able to recruit new staff from the EU/UK Post Brexit?

    EU rules on admission to the Member States for the purpose of work currently exist and will apply in some form to UK citizens post Brexit. The UK currently also has provision for immigration from the Rest of the World for work purposes – details for recruitment from the EU post Brexit are still to be defined.

    If there are skills required for your business that the local market cannot meet, how can these best be met post Brexit?

    If affected, you should: Seek advice on immigration matters and engage with staff.

  • Will staff that commute across the border be delayed?

    There are more than 30,000 people who cross the border each day to work. As the common travel will be upheld, existing employees are unlikely to be impacted

    However do consider: Do I have staff that cross the border to work? How do they travel to work (train, bus, car)? Should travel plans be considered post brexit to avoid delays?

  • Will my current EU/UK staff be allowed to continue to work here?

    How continued rights to work will be affected by the current negotiations is not yet clear – however we do know that as a minimum those who have been in the UK for more than 5 years will have a right to stay. A minimum similar arrangement is likely for UK workers in the EU.

    Consider what proportion of my staff and which key roles are currently undertaken by staff with EU or UK citizenship (depending on location)?

    Have they been resident in the EU/UK for more than 5 years?

    Are staff covered by the common travel area rules?

    How can staff be supported to ensure continued residency?

  • Will I be able to continue to use seasonal workers from the EU/UK?

    The EU supports the need for seasonal workers – EU rules cover all sectors that are dependent on seasonal conditions (Directive 2014-36). The details of access to seasonal labour in the UK post Brexit are yet to be defined.

    Consider if your business is reliant on seasonal workers from the EU/UK and how any changes to access to workers will affect your business.

  • VAT

    Post Brexit, VAT rules in relation to buying and selling goods between the UK and EU are likely to change. There may be VAT implications for what will be treated as exports from the UK to the EU, and imports to the EU from a third country

    Will post Brexit VAT rules impact on my cross border trading significantly?

    How best can I manage these changes for my business?

  • Import Duty

    You may have to pay import duty depending on the classification of your products and the final arrangements put in place post Brexit. Import duties can be deferred and reliefs are available in a number of circumstances.

    Consider, if import duties would be applied to your goods, would reliefs apply?

    Do I know how to claim import duty reliefs?

  • Currency

    If you trade across the border your business may be affected by sharp changes in currency values. If your margins are small, failure to manage your currency could have a big effect.

    How do I currently manage currency volatility?

    Are there other mechanisms I should consider if Sterling devaluation was to continue?

  • EU Funding

    There are a wide range of EU funding programmes that businesses currently have access to (233 at present for SMEs). How this access will change beyond 2019 has yet to be determined, however countries outside of the EU can currently access many of these funds by agreement as a third party.

    Does my business currently avail of EU funding mechanisms?

    How reliant is my business on these?

    Do any of my key suppliers have reliance on EU funding?

  • Capital

    Currently businesses can freely move capital across the border. This is an important component in crossborder transactions and investments, ensuring few restrictions or capital controls on moving funds between member states.

    Will post Brexit movement of capital rules impact on my cross-border trading?

    Do I have adequate working capital?

Research and Development Tax Credits

  • What relief is available for R&D?

    A company with qualifying R&D expenditure will benefit from a 25% R&D tax credit based on the qualifying R&D expenditure. As the tax credit is in addition to any allowable deduction for R&D expenditure in the accounts of the company, the effective rate of tax relief is 37.5%.

    Read More
  • What R&D projects qualify for relief?

    To be a qualifying R&D project the project must seek to achieve an advance in the overall knowledge or capability (not a company’s own state of knowledge or capability) in a field of science or technology. An advance in science or technology may result in physical adaptations to a product e.g. a new or more efficient product, or improvements to a process e.g. cost improvements. A project is not considered an advance simply because science or technology has been used in its creation. Even if the advance which the project sought to achieve is not realised R&D can still be deemed to take place.

    Read More
  • What costs qualify for relief?

    All costs (net of grant aid) incurred on qualifying R&D projects qualify for relief. This includes both revenue expenditure and qualifying capital expenditure on plant and machinery used for the R&D project.

  • How can I claim the relief?

    The relief can be claimed by filling in the necessary boxes in the company’s corporation tax return. No supporting documentation needs to be filed with the return, however, it is important that sufficient backup documentation is retained by the company.

    From January 2009 all claims for research and development tax credits must be made within 12 months from the end of the accounting period in which the expenditure was incurred.

  • Is relief available for expenditure incurred on buildings?

    A tax credit of 25% is available in respect of expenditure incurred on buildings used for R&D purposes. To qualify the company must be entitled to claim Industrial Buildings Allowance on the building.

    Read More
  • Is relief available in respect of subcontracted R&D?

    Relief is available in respect of payments to a university or institute to carry out R&D activities. The relief is restricted to the greater of 5% or €100,000 of the expenditure incurred by the company itself on R&D activities. E.g. if a company incurs €250,000 on R&D expenditure during the year and also pays €10,000 to a university to carry out R&D then as €10,000 is less than €12,500 (€250,000 x 5%) no restriction will apply and the full amount of €260,000 qualifies for relief.

    Read More

Research and Development Tax Relief

  • What relief is available for R&D?

    R&D relief is available to companies who have expenditure on R&D activities in an accounting period. It is not available to either sole traders or partnerships. The relief reduces the company’s corporation taxable profits for the relevant period. The amount of relief available to a company depends on the company’s size. There are two schemes of relief available depending on whether a company is small or medium sized (SME) or a large company.

    Read More
  • What R&D projects qualify for relief?

    To be a qualifying R&D project the project must seek to achieve an advance in the overall knowledge or capability (not a company’s own state of knowledge or capability) in a field of science or technology. An advance in science or technology may result in physical adaptations to the product e.g. a new or more efficient product, or improvements to the process e.g. cost improvements. A project is not considered an advance simply because science or technology has been used in its creation. Even if the advance which the project sought to achieve is not realised R&D can still be deemed to take place.

    Read More
  • What costs qualify for relief?

    Relief is available in respect of day to day running costs. This includes the following:

    • Employee costs
    • Externally provided workers
    • Materials
    • Utilities
    • Computer software
    • Payments to clinical trials volunteers
    • Subcontracted R&D costs
  • How can I claim the relief?

    The claim for R&D relief is made in your company’s tax return. The time limit for making the claim is two years after the end of the accounting period. There is no requirement to submit supporting documentation to HMRC unless they request same in order to process the claim. However, it is important that good records are maintained to support the R&D claim.

  • Is there any assistance available?

    Grants and subsidies may be available from State bodies such as Invest NI to assist with R&D projects.

    Read More
  • Is relief available for capital expenditure?

    Capital allowances at the rate of 100% are available in respect of money spent on qualifying capital assets such as plant and machinery used in R&D projects.

  • Is relief available in respect of subcontracted R&D?

    Where an SME subcontracts R&D work to a third party the SME may claim relief. The amount of relief will depend on whether the payment is to a connected company. If the payment is to a connected company, then the SME can claim R&D relief on the lower of the payment it makes to the subcontractor and the relevant expenditure of the subcontractor.

    Read More

Selling Products into Ireland

  • Must I have an office in Ireland?

    It is not necessary to have an office in Ireland to facilitate sales of goods if the goods are to be sold directly to the purchaser. However, if you wish to target a broader spectrum of clients you may wish to consider establishing a presence there for other commercial reasons.

  • Must I form a Company in Ireland?

    A Company is not necessary but if you anticipate profits in Ireland or your venture has an element of risk to it you may wish to consider ring-fencing this within a Company structure. The rates of tax in Ireland must also be considered in determining the route you want to take.

  • Do I need a licence to sell products in Ireland?

    Not generally, but this depends on the type of product to be sold. For example, a licence would be required for the sale of pharmaceuticals. Specific advice should be taken on each product.

  • Must I declare my goods at Customs? Do I need to complete export documentation?

    There is free movement of goods within the EU and the only goods which need to be declared at Customs are excisable goods i.e. tobacco, spirits, wines and beer.

    Should your exports from Northern Ireland exceed £250,000 per annum you will need to submit UK Intrastat returns.

    However, this may change when the UK leave the EU on 29 March 2019.

  • Must my product meet certain regulations?

    You must ensure compliance with required Consumer/Health & Safety Standards. Specific advice should be taken for each product. For Consumer Regulations visit the following websites –

    Consumer Association of Ireland
    www.consumerassociation.ie

    Food Safety Authority of Ireland
    www.fsai.ie

    Office of the Director of Consumer Affairs
    www.odca.ie

    Department for the Economy
    www.economy-ni.gov.uk

    The Central Bank of Ireland
    www.centralbank.ie

  • What liability do I have for defective products in Ireland?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    Read More
  • Do I need to have product liability insurance?

    Yes. You should also ensure that the current product liability insurance policy issued to you in Northern Ireland is not restricted to sales within Northern Ireland. If it is so restricted, you will need to negotiate with your insurance company to ensure that the product liability insurance extends to sales into Ireland.

  • What if I am employing someone to work for me in Ireland?

    Irish Resident Employee

    In general terms, if your Company is based in Northern Ireland and employs an Irish resident to carry out duties in Ireland, a PAYE scheme must be operated in Ireland and you, as the employer, are required to register and account for PAYE/PRSI contributions in Ireland.

    Read More
  • Is my Employers Liability Insurance valid in Ireland?

    More than likely it is not. Specific advice should be taken by you from your Insurance Company. If employing someone in Ireland it is essential that that employee is covered by Insurance which applies to Ireland Health & Safety Law.

  • Are my vehicles/drivers insured in Ireland?

    Normally, vehicles used for business purposes must be specifically insured for business use. It would be wise, prior to undertaking a new business venture Ireland, to obtain written confirmation from your Insurance Company in Northern Ireland that it will cover your vehicles/drivers for business purposes in Ireland.

    Read More
  • Are the traffic/vehicle regulations the same in Ireland?

    While traffic/vehicle regulations are broadly similar, specific advice should be taken in each instance. For further information on driver and vehicle licensing in Ireland go to the following websites -

    Motor Tax Online
    www.motortax.ie

    Department of Transport, Tourism and Sport
    www.dttas.ie

    Read More
  • Do I need a written contract?

    It is very wise in all instances to have a written contract, particularly in business-to-business contracts where there is more scope to modify the provisions of the general law. In cross border sales, it is particularly important to define such matters as when risk passes, the liabilities of Distributors or Sales Agents etc.

    Read More
  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • Do I charge UK VAT? Must I register for Irish VAT?

    Currently if you are VAT registered in the UK, you will charge UK VAT if your Irish based customer is not Irish VAT-registered. If your customer is Irish VAT registered and the goods are being supplied to them for business purposes, you will verify their VAT number and business address with HM Revenue & Customs.

    This will then enable you to zero rate the supply and the customer will account for the VAT under the reverse charge mechanism. You must also keep evidence that the goods have been dispatched from the UK.

    Read More
  • Should I invoice in Sterling or Euro?

    The first point to note is that, from a technical point of view, VAT invoices raised by a Northern Ireland-based business can be issued in a foreign currency but you must also convert not only the value of the invoice but the VAT amount into Sterling on the invoice.

    Read More
  • Is it worthwhile opening a Euro account?

    Where you are making and receiving Euro payments it is often advantageous to maintain a Euro bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices) thus the fewer deals you do the less ‘spread’ you pay.

    Read More
  • How do I open a Euro account?

    The most convenient way to open a Euro account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    Read More
  • Can I protect myself against exchange rate fluctuation?

    Exchange rate risk is an important consideration and should always be actively managed. This is best done by netting payments and receipts. However, amounts and timings rarely match exactly, so forward foreign exchange contracts can be used.

    Read More
  • How can I ensure I get paid?

    It is preferable to insist on “cash on delivery”. If you cannot get payment on delivery and the purchaser subsequently defaults on payment, then it would be advisable to retain the services of a Solicitor/Debt Collection Agency within Ireland to collect payment should your client default in payment in due course.

    While there are circumstances where it would be possible to secure judgment in Northern Ireland (where the contract may have been made), it is advisable to secure judgment in Ireland as it will in turn be easier to enforce an Irish Judgment against an Irish Debtor.

    You may also wish to take advice on “Retention of Title”.

  • Where do I pay my tax?

    If you are self-employed in the UK, you will be required to submit a tax return by 31 October (for manual returns) or 31 January (for online returns) following the end of the tax year (5 April) under the self-assessment arrangements and pay any tax becoming due to the Collector of Taxes.

    Tax is paid on 31 January and 31 July of each year with January being the time for paying the balance of tax for the previous tax year and also the 1st payment on account for the current year. The July payment is the 2nd payment on account for that same tax year. Payments on account are calculated at 50% each of the previous year’s tax liability.

    These payments can be lowered if you know your tax bill is less than in the previous year.

    Read More

Selling Products into Northern Ireland

  • Must I have an office in Northern Ireland?

    It is not necessary to have an office in Northern Ireland to facilitate sales of goods if the goods are to be sold directly to the purchaser. However, if you wish to target a broader spectrum of clients you may wish to consider establishing a presence there for other commercial reasons.

  • Must I form a company in Northern Ireland?

    A company is not necessary but if you anticipate profits in the UK or your venture has an element of risk to it, you may wish to consider ring fencing this within a company structure. The rates of tax in the UK must also be considered in determining the route you want to take. As trade increases, it may be advisable for tax reasons to establish a separate company.

  • Do I need a licence to sell products in Northern Ireland?

    Not generally, but this depends on the type of product to be sold. For example, a licence would be required for sale of pharmaceuticals. Specific advice should be taken on each occasion.

  • Must I declare my goods at Customs? Do I need to complete export documentation?

    There is free movement of goods within the EU and the only goods which need to be declared at Customs are excisable goods i.e. tobacco, spirits, wines and beer. However, this may change when the UK leaves the EU on 29 March 2019.

  • Must my product meet certain regulations?

    You must ensure compliance with required Consumer/ Health & Safety Standards. Specific advice should be taken on each occasion but assistance may be obtained from websites. For Consumer Regulations visit the following websites – www.consumerline.org and the website of the UK Department of Business, Innovation and Skills (BIS) – www.bis.gov.uk. See also the Northern Ireland Department of Enterprise Trade and Investment website (Consumer Affairs Section) – www.economy-ni.gov.uk

  • At what point does the risk pass from me (the seller) to the purchaser?

    Risk, in terms of loss, is the responsibility that a carrier, borrower, user/purchaser of property or goods assumes if there is damage or loss. “Passing of Risk” means the point at which the buyer will be responsible for the goods. For example, if goods are delivered by lorry, who bears the loss if the goods are stolen in transit before they reach the purchaser?

    This issue arises just as much within your own jurisdiction as in a cross-border context and is covered by the Sale of Goods legislation, which is broadly similar in both jurisdictions. It can (and should) also be covered by your written contract.

    Normally, in the absence of a written contract stating something different, where the seller arranges delivery to the purchaser, risk will only pass to the purchaser on receipt of delivery. In a cross-border sale, this may therefore mean that risk would only pass to the buyer when he receives the goods in Northern Ireland.

    In a cross-border context, it may be wise to consider appointing a Distributor in the cross-border market. As soon as that Distributor collects goods from your premises in Ireland, the risk passes to him. For further definitions, see Distributor and Sales Agent.

  • What liability do I have for defective products in Northern Ireland?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    If goods are being sold through a distributor in Northern Ireland, the Distributor will generally be required to take on liability for defective products, as modified by negotiation in any written contract between you and the Distributor. This would be subject to the Distributor being entitled to indemnity from the seller for those defective products. In such circumstances, the Distributor would deal directly with the buyer and would in turn be entitled to be compensated by the seller for any loss arising to the Distributor as a result of the seller’s negligence/ breach of contract. If, however, goods are sold by you personally or through a sales agent, then you will be liable for defective products under Northern Ireland legislation.

  • Do I need to have product liability insurance?

    Yes. You should also ensure that the current product liability insurance policy issued to you in Ireland is not restricted to sales within Ireland. If it is so restricted, you will need to negotiate with your insurance company to ensure that the product liability insurance extends to sales into the United Kingdom.

  • In the event that the product is defective at delivery, what do I need to know about after-sales service in Northern Ireland?

    Unless you are selling through a Distributor, you or your Sales Agent will be liable for after sales service for that defective product in Northern Ireland.

  • What if I am employing someone in Northern Ireland to work for me?

    The Potential Implications of Brexit section highlights some of the issues to be considered re Brexit with regards to the movement of people.

    Read More
  • Is my Employers Liability Insurance valid in Northern Ireland?

    Your Employer’s Liability Insurance is most likely NOT valid in Northern Ireland. Specific advice should be taken by you from your insurance company. If employing someone in Northern Ireland, it is essential that the employee is covered by insurance which applies to Northern Ireland Health & Safety Law.

  • Are my vehicles/drivers insured in Northern Ireland?

    Normally, vehicles used for business purposes should be specifically insured for such uses. It would be wise, prior to undertaking a new business venture in Northern Ireland, to obtain written confirmation from your insurance company in Ireland that it will cover your vehicles/drivers for business purposes in Northern Ireland.

  • Are the traffic/vehicle regulations the same in Northern Ireland?

    While traffic/vehicle regulations are broadly similar, specific advice should be taken in each instance. For further information on driver and vehicle licensing in Northern Ireland go to the Northern Ireland Department of Environment website – www.nidirect.gov.uk In certain instances, should you wish to avoid the expense of compliance with the traffic/vehicle regulations of a second jurisdiction, it may be wise to consider retaining a courier or transport agent to deliver your goods within Northern Ireland.

  • Do I need a written contract?

    It is very wise in all instances to have a written contract, particularly in business-to-business contracts where there is more scope to modify the provisions of the general law. In cross border sales, it is particularly important to define such matters as when risk passes, the liabilities of distributors or sales agents etc.

    As a result of Brexit, it is not currently clear whether the EU Regulations governing civil and commercial contracts between member states will apply to Northern Ireland after March 2019. As a consequence, in order to avoid real commercial consequences (i.e. legal fees and delay) resulting from legal uncertainty as to which country’s courts have jurisdiction to resolve disputes post March 2019, in business-to-business sales you are strongly advised to contain an explicit jurisdiction clause within your terms and conditions when trading cross-border. It is highly likely that such a clause will be recognised by the courts in both jurisdictions. (In sales to consumers, such a clause will not be binding on the consumer.)

  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • Do I charge Irish VAT? Must I register for UK VAT?

    Currently if you are selling goods directly from Ireland the charging of VAT will depend on the VAT status of your customer. If your customer is VAT registered and the goods are being dispatched to Northern Ireland for business purposes, effectively no VAT needs be charged by the supplier. However, the customer must account for the VAT under the reverse charge mechanism (note that special wording in this regard must be included on your invoice). In this case you will need to verify your customers VAT status and keep evidence that the goods have been dispatched. If the customer is not registered for UK VAT, then Irish VAT must be charged.

    Post Brexit the movement of goods into or out of the UK may be treated as imports and exports, meaning the reverse charge procedure will not apply and input VAT will have to be paid by the customer at the point of entry which will of course also impact cash flow. The customer may also need to consider customs duties and there may also be an additional administration burden on you with regards to import and export documentation. The Potential Implications of Brexit section provides further information.

    You should also be aware of the rules regarding distance selling e.g. selling goods directly to non VAT registered persons by mail order, catalogues, via the internet etc. Each EU member state has its own distance selling thresholds and if you exceed these thresholds you are required to register for VAT in that member state and charge VAT accordingly. If you do not exceed the threshold, then Irish VAT should be charged.

    Read More
  • Should I invoice in Sterling or Euro?

    The first point to note is that, from a technical point of view, VAT invoices can be expressed in a foreign currency but the corresponding figures should be shown in Euro. The invoice must also contain the actual VAT amount in Euro.

    A copy of the invoice must be kept to show the figures that were adopted.

    For conversion purposes you should use the Central Bank rates which are available online at www.centralbank.ie.

    It is possible to agree an alternative rate with the Revenue i.e. a calendar month exchange system. Please note the agreed method must then be used for all of your foreign currency transactions.

    Your Northern Ireland client may prefer to agree a price in sterling and pay you in sterling, so that they are not exposed to exchange rate fluctuations. If you want to facilitate your client, you might agree a Sterling equivalent with your client, either on the invoice or as part of a separate contract or agreement. The disadvantage of this is that you then assume the exposure to exchange rate fluctuation.

    Some firms will state on their invoices that, should client companies wish to settle the invoice in sterling, they should contact their accounts department on the day of settlement to agree a suitable rate of exchange on that day.

    Do not forget to consider your own circumstances and whether or not it would suit you to receive sterling at a certain point in time.

  • Is it worthwhile opening a Sterling account?

    Where you are making and receiving sterlingpayments, it is often advantageous to maintain a sterling bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices), so the fewer deals you do the less ‘spread’ you pay.

    Where there is considerable bias towards payments or receipts, hence minimal netting, a sterling account will provide an excellent audit trail and the ability to convert currency in larger amounts which are liable to attract a better rate of exchange.

  • How do I open a Sterling account?

    The most convenient way to open a sterling account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    That said, there is nothing to stop you using another bank specifically for your foreign currency business and some account holders prefer to shop around and form a secondary banking relationship.

    Sterling accounts can be domiciled in Ireland without the need to approach a bank in Northern Ireland.

  • Can I protect myself against exchange rate fluctuation?

    Exchange rate risk is an important consideration and should always be actively managed. This is best done by netting payments and receipts. However, amounts and timings rarely match exactly, so forward foreign exchange contracts can be used.

    A forward foreign exchange contract is a binding contract between two parties to buy or sell a specified amount of foreign currency at an agreed rate on or between a specified future date or dates.

    These contracts are offered by all the major banks and allow you to guarantee a future value for your sterling receipts, thus completely eliminating foreign exchange risk.

    It is prudent to compare the spot price (i.e. the exchange rate now) and the forward market price (i.e. the price that the bank will commit to offering you at a point in the future) before agreeing any deal.

    Currency fluctuations could be experienced with the exit from the European Union and therefore currency management plans should be put in place. See the Potential Implications of Brexit section for further details.

  • How can I ensure I get paid?

    It is preferable to insist on “cash on delivery”. If you cannot get payment on delivery and the purchasers subsequently defaults on payment, then it would be advisable to retain the services of a Solicitor/Debt Collection Agency within Northern Ireland to collect payment. While there are circumstances where it would be possible to secure judgment in the Republic of Ireland (where the contract may have been made), it is advisable to secure judgment in Northern Ireland as it will in turn be easier to enforce a Northern Ireland Judgment against a Northern Ireland Debtor. (For more information on this subject read the Exploring a Cross-Border Joint Venture section of this Booklet).

    You may also wish to take advice on the “Retention of Title”.

  • Where do I pay my tax?

    If you are self-employed in Ireland you will be required each year to submit a Tax Return by 31st October (manual filing) or if filing online there may be an extended filing date. This is announced each year by the Revenue Commissioners and is normally at some date in early November. At this date, you are also required to pay to the Collector General in Limerick the balance of tax you owe for the tax return you are submitting and also make payment towards the current tax year – known as preliminary tax.

    Read More

Selling Services into Ireland

  • At what point does the risk pass from me (the seller) to the purchaser?

    Risk, in terms of loss, is the responsibility a carrier, borrower, user/purchaser of property or goods assumes if there is damage or loss. Passing of Risk means the point at which the buyer will be responsible for the goods. For example, if goods are delivered by lorry, who bears the loss if the goods are stolen in transit before they reach the purchaser?

    Read More
  • Must I have an office in Ireland?

    It is not necessary to have an office in Ireland to facilitate a supply of services. However, if you wish to target a broader spectrum of clients you may wish to consider establishing a presence there for other commercial reasons.

     

  • Must I form a company in Ireland?

    A Company is not necessary but if you anticipate profits in Ireland or your venture has an element of risk to it, you may wish to consider ring-fencing this within a Company structure. The rates of tax in Ireland must also be considered in determining the route you want to take.

  • Do I need a licence to sell my services in Ireland?

    This will depend on the type of service to be sold. For example, if selling financial services, it would be necessary for you to consult the Central Bank of Ireland. See its website at www.centralbank.ie. Specific advice should be taken on each occasion.

  • Must my services adhere to certain regulations?

    Again, this will depend on the type of service being sold. Specific advice should be taken on each occasion but assistance may be obtained from websites. For further information on regulations which may apply go to –

    Consumer Association of Ireland
    www.consumerassociation.ie

    Food Safety Authority of Ireland
    www.fsai.ie

    Office of the Director of Consumer Affairs
    www.odca.ie

    Department of Enterprise, Jobs & Innovation
    www.economy-ni.gov.uk

    Central Bank of Ireland
    www.centralbank.ie

  • What liability do I have for substandard work in Ireland?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    Note that in the absence of an explicit agreement to the contrary in a business-to-business contract, Irish law will apply.

  • Do I need Professional/Trade indemnity insurance?

    Professional/Trade indemnity insurance is an insurance policy which provides indemnity to you the Service Provider by your Insurance Company for Breach of Contract. That is, in the event that you, the service provider, provide a substandard service by which the Service Receiver sustains loss, then the insurance company guarantees to pay any loss which the service receiver has suffered. This is a service insurance which should specifically be taken out in Ireland and you will be required to take out this insurance over and above the professional /trade indemnity insurance which you may have in Northern Ireland for services provided in Northern Ireland. Again, you should check with your Insurance Broker as to the adequacy of your insurance for provision of services in Ireland.

  • What if I am employing someone in Ireland to work for me?

    Section 18 highlights some of the issues to be considered re Brexit with regards to the movement of people.

    Read More
  • Is my Employers Liability Insurance valid in Ireland?

    It is more than likely that your Employers Liability Insurance issued in Northern Ireland will not be valid in respect of services provided by them for you in Ireland. Whereas Employers Liability Insurance (except for “one man” companies) is compulsory in Northern Ireland, it is not compulsory in the Republic of Ireland. It is however very advisable to have Employers Liability Insurance in Ireland as the level of Claims in Ireland is generally higher than in Northern Ireland.

  • Are my vehicles/drivers insured in Ireland?

    In the normal course, vehicles used for business use require to be specifically insured for business purposes. It would be wise, prior to undertaking a new business venture in Ireland to obtain written confirmation from your Insurance Company in Northern Ireland that it will cover your vehicles/drivers for business purposes in Ireland.

    If you have Irish resident employees with personal use of UK vehicles you will need to consider VRT (Vehicle Registration Tax).

  • Are the traffic/vehicle regulations the same in Ireland?

    While traffic/vehicle regulations are broadly similar, specific advice should be taken in each instance. For further information on driver and vehicle licensing in Ireland go to the following websites -

    Motor Tax Online
    www.motortax.ie

    Department of Transport
    www.transport.ie

  • Do I need a written contract?

    It is very wise in all instances to have a written contract, particularly in business-to-business contracts where there is more scope to modify the provisions of the general law.

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  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • Do I charge UK VAT? Must I register for Irish VAT? Are there special rules for services?

    The rules relating to VAT on services are different (and more complex) than those relating to goods.

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  • Will any tax be deducted from my payments?

    Where you are engaged in the construction, forestry and meat processing industries then a withholding tax known as Relevant Contracts Tax (“RCT”) applies. This is an electronic system whereby the principal contractor notifies the Revenue Commissioners online, of all relevant contracts and in return is advised of the applicable rate.

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  • Should I invoice in Sterling or Euro?

    The first point to note is that, from a technical point of view, VAT invoices raised by a Northern Ireland-based business can be issued in a foreign currency but you must also convert not only the value of the invoice but the VAT amount into Sterling on the invoice.

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  • Is it worthwhile opening a Euro account?

    Where you are making and receiving Euro payments it is often advantageous to maintain a Euro bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices) thus the fewer deals you do the less ‘spread’ you pay.

    Read More
  • How do I open a Euro account?

    The most convenient way to open a Euro account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    Read More
  • Can I protect myself against exchange rate fluctuation?

    Exchange rate risk is an important consideration and should always be actively managed. This is best done by netting payments and receipts. However, amounts and timings rarely match exactly, so forward foreign exchange contracts can be used.

    Read More
  • How can I ensure I get paid?

    It is preferable to insist on “cash on delivery”. If you cannot get payment on provision of the service and the service receiver subsequently defaults on payment, then it would be advisable to retain the services of a Solicitor/Debt Collection Agency within Ireland to collect payment should your client default in payment in due course. While there are circumstances where it would be possible to secure judgment in Northern Ireland (where the contract may have been made), it is advisable to secure judgment in Ireland as it will in turn be easier to enforce an Irish Judgment against an Irish Debtor.

    You may also wish to take advice on “Retention of Title”.

  • Where do I pay my tax?

    If you are self-employed in the UK, you will be required to submit a tax return by 31 October (for manual returns) or 31 January (for online returns) following the end of the tax year (5 April) under the self-assessment arrangements and pay any tax becoming due to the Collector of Taxes. Tax is paid on 31 January and 31 July of each year with January being the time for paying the balance of tax for the previous year and also the 1st payment on account for the current year. The July payment is the 2nd payment on account for that same tax year.

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Selling Services into Northern Ireland

  • Must I have an office in Northern Ireland?

    It is not necessary to have an office in Northern Ireland to facilitate a supply of services. However, if you wish to target a broader spectrum of clients you may wish to consider establishing a presence there for other commercial reasons. This is discussed in the section: I am based in Ireland and want to establish a presence in Northern Ireland.

  • Must I form a company in Northern Ireland?

    A Company is not necessary but if you anticipate profits in the UK or your venture has an element of risk to it, you may wish to consider ring fencing this within a Company structure. The rates of tax in the UK must also be considered in determining the route you want to take. As trade increases, it may be advisable for tax reasons to establish a separate company.

  • Do I need a licence to sell my services in Northern Ireland?

    This will depend on the type of service to be sold. For example, if selling financial services, it would be necessary for you to consult the Financial Services Authority (FSA). Specific advice should be taken on each occasion.

  • Must my services adhere to certain regulations?

    This will depend on the type of service being sold. For further information on regulations which may apply go to – www.businesslink.gov.uk. Specific advice should be taken on each occasion.

  • What liability do I have for substandard work in Northern Ireland?

    The general law infers contractual warranties as to quality as well as a duty of care to users. The standards are higher if selling to consumers as opposed to selling to another business. However, some modifications to the general law standards are allowable in written business-to-business contracts.

    Note that in the absence of an explicit agreement to the contrary in a business-to-business contract, Northern Ireland law will apply.

  • Do I need professional/trade/indemnity insurance?

    Professional/Trade Indemnity Insurance is an insurance policy which provides indemnity to you the Service Provider by your Insurance Company for Breach of Contract. That is, in the event that you, the service provider, provide a substandard service by which the Service Receiver sustains loss, then the insurance company guarantees to pay any loss which the service receiver has suffered. This is a service insurance which should specifically be taken out in Northern Ireland and you will be required to take out this insurance over and above the professional indemnity insurance which you may have in Ireland for services provided in Ireland. You should check with your Insurance Broker as to the adequacy of your insurance for provision of services in Northern Ireland.

  • What if I am employing someone in Northern Ireland to work for me?

    The Potential Implications of Brexit section highlights some of the issues to be considered re Brexit with regards to the movement of people.

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  • Is my Employers Liability Insurance valid in Northern Ireland?

    It is more than likely that your Employers Liability Insurance issued in the Republic of Ireland will NOT be valid in respect of services provided by them for you in Northern Ireland. It is also important to note that in Northern Ireland (except for “one man” companies) Employers Liability Insurance is compulsory. You should consult with your insurance provider.

  • Are my vehicles/drivers insured in Northern Ireland?

    Normally, vehicles used for business purposes should be specifically insured for such uses. It would be wise, prior to undertaking a new business venture in Northern Ireland, to obtain written confirmation from your Insurance Company in the Republic of Ireland that it will cover your vehicles/drivers for business purposes in Northern Ireland.

  • Are the traffic/vehicle regulations the same in Northern Ireland?

    While traffic/vehicle regulations are broadly similar, specific advice should be taken in each instance. For further information on driver and vehicle licensing in Northern Ireland go to the Northern Ireland Department of Environment website www.doeni.gov.uk. In certain instances, should you wish to avoid the expense of compliance with the traffic/vehicle regulations of a second jurisdiction, it may be wise to consider retaining a courier or transport agent to deliver your goods within Northern Ireland.

  • Do I need a written contract?

    It is very wise in all instances to have a written contract, particularly in business-to-business contracts where there is more scope to modify the provisions of the general law.

    It is not currently clear whether the EU Regulations governing civil and commercial contracts between member states will apply to Northern Ireland after March 2019. As a consequence, in order to avoid real commercial consequences (i.e. legal fees and delay) resulting from legal uncertainty as to which country’s courts have jurisdiction to resolve disputes post March 2019, in business-to-business sales you are strongly advised to contain an explicit jurisdiction clause within your terms and conditions when trading crossborder. It is highly likely that such a clause will be recognized by the courts in both jurisdictions. (In sales to consumers, such a clause will not be binding on the consumer).

  • What are typical payment/credit terms?

    Typical credit terms are 30 days. However, this can vary considerably in practice and depending on the sector in which you operate.

  • Do I charge Irish VAT? Must I register for UK VAT? Are there special rules for services?

    There are special rules that apply to VAT in respect of services and the charge to VAT will depend on the type of service supplied and also the deemed place of supply. From 1 January 2010 there is a general place of supply rule depending on whether the customer is a business or a consumer. The general rule for the supply of services to a business is the place of supply will be where the customer is based (i.e. Northern Ireland). The customer must then account for the VAT under the reverse charge mechanism i.e. the customer will charge themselves VAT on the services they receive and provided that the services are received for the purpose of their taxable trade they will also be able to claim a deduction for this VAT. If the supply is to a consumer, then the place of supply will be Ireland and Irish VAT must be charged. There are some exceptions to this general rule as follows

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  • Should I invoice in Sterling or Euro?

    The first point to note is that, from a technical point of view, VAT invoices can be expressed in a foreign currency but the corresponding figures should be shown in Euro. The invoice must also contain the actual VAT amount in Euro.

    Read More
  • Is it worthwhile opening a Sterling account?

    Where you are making and receiving Sterling payments, it is often advantageous to maintain a Sterling bank account. This provides the ability to net currency payments against currency receipts, thus minimising the number of foreign exchange deals that you do. Every foreign exchange deal is subject to a ‘spread’ (the difference between the bank’s buying and selling prices), so the fewer deals you do the less ‘spread’ you pay.

    Where there is considerable bias towards payments or receipts, hence minimal netting, Sterling account will provide an excellent audit trail and the ability to convert currency in larger amounts which are liable to attract a better rate of exchange.

  • How do I open a Sterling account?

    The most convenient way to open a sterling account will be via your existing bankers as this will minimise the amount of documentation that you will be required to produce to meet legislative requirements. Your existing relationship manager will be familiar with your needs and may also be holding security or deeds to facilitate overdraft or loan facilities which may be extendible to your new account.

    That said, there is nothing to stop you using another bank specifically for your foreign currency business and some account holders prefer to shop around and form a secondary banking relationship.

    Sterling accounts can be domiciled in Ireland without the need to approach a bank in Northern Ireland.

  • Can I protect myself against exchange rate fluctuation?

    Exchange rate risk is an important consideration and should always be actively managed. This is best done by netting payments and receipts. However, amounts and timings rarely match exactly, so forward foreign exchange contracts can be used.

    Read More
  • How can I ensure I get paid?

    It is preferable to insist on “cash on delivery”. If you cannot get payment on provision of the service and the service receiver subsequently defaults on payment, then it would be advisable to retain the services of a Solicitor/Debt Collection Agency within Northern Ireland to collect payment should your client defaulting payment in due course.

    While there are circumstances where it would be possible to secure judgment in Ireland (where the contract may have been made), it is advisable to secure judgment in Northern Ireland as it will in turn be easier to enforce a Northern Ireland Judgment against an Northern Ireland Debtor.

  • How do I pay my tax?

    If you are self-employed in Ireland you will be required each year to submit a Tax Return by 31st October (manual filing) or if filing online there may be an extended filing date. This is announced each year by the Revenue Commissioners and is normally at some date in early November following the end of the previous tax year. At this date, you are also required to pay to the Collector General in Limerick the balance of tax you owe for the tax return you are submitting and also make payment towards the current tax year – known as preliminary tax.

    Read More
  • Is there Professional Services Withholding Tax in Northern Ireland?

    There is no professional services withholding tax in the UK. The only type of withholding tax that applies in Northern Ireland is in relation to the construction industry.

    The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for construction work must be made. These payments may be made gross in some circumstances or tax at 20% or 30% may be deducted from payments net of VAT.

    As the amount of tax to be applied to payments is dependent on the subcontractors own status with HMRC the principal contractor has an obligation to verify the subcontractors details before making any payments.

    This is a very complex area and specific professional advice should be sought.

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