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.
These rules apply to the EC “single market” and therefore may change post Brexit.
Currently the distance selling threshold for selling into UK is £70,000 or €100,000
If your dispatches from Ireland exceed €635,000 per annum or total arrivals from other Member States exceed €500,000 per annum you will be required to complete Irish Intrastat Returns.
A Vat Information Exchange System (VIES) Return would also be required to be completed in respect of the EC supply of goods.
Boxes E1 and E2 on your VAT return are used to record EC Transactions of goods.
If a non-established business sells goods within the UK the VAT Registration threshold is £1.