Simple Guides

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.

You will then account for the VAT on the goods under the reverse charge mechanism i.e. you will charge yourself Irish VAT on the goods you receive and provided the goods are for the purpose of your taxable trade, you will also be able to claim a deduction for this VAT.

Boxes E1 and E2 on your VAT return are used to record EC transactions of goods. You may also need to submit intrastat returns if your arrivals of goods exceeds €635,000 in a calendar year.

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. Section 18 provides further information.