The Government will be introducing changes to simplify the way VAT is administered for some goods sold between Northern Ireland and the EU, and some low value imports into Northern Ireland from 1 July 2021 (otherwise known as e-Commerce VAT changes). This mirrors an EU-wide reform, which the UK is implementing in Northern Ireland in line with the obligations set out under the Northern Ireland Protocol, where EU VAT rules with respect to goods will continue to apply in Northern Ireland. However, Northern Ireland is, and will remain, part of the UK’s VAT system.
Alongside these changes, two new IT systems will be introduced: one for accounting and collecting VAT on sales of goods between Northern Ireland and the EU – the One Stop Shop; and the other for accounting and collecting VAT on imports of non-excise goods from non-EU countries, where they are in consignments that do not exceed £135 (150 EUR) in value – the Import One Stop Shop. Both systems are designed to reduce burdens on business and facilitate the collection of VAT on sales of goods across Northern Ireland and the EU and; and are optional for businesses and online marketplaces to use.
The UK will be taking a phased approach to the introduction of these IT systems. HMRC have today published guidance on GOV.UK setting out what this will mean for businesses. However, in many cases, if businesses and online marketplaces opt not to register to use these systems, there will be no change in how they declare and pay for VAT on their sales of goods to consumers in Northern Ireland and EU Member States.
Source Parliament UK
