Guidance

VAT on movements of goods between Northern Ireland and the EU

How to charge and account for VAT on the movement of goods between Northern Ireland and EU member states (VAT Notice 725).

• From: HM Revenue & Customs
• Published: 31 December 2020
• Last updated: 2 May 2024 — See all updates

This notice cancels and replaces Notice 725 (December 2020).

It applies to movements of goods from Northern Ireland to the EU and movements of goods from the EU to Northern Ireland.

Services are covered in Notice 741A Place of supply of services.

Goods exported from Northern Ireland to non-EU destinations outside the UK are covered in Notice 703 Goods exported from the UK.

Goods imported to Northern Ireland from outside the UK and EU are covered in Notice 702 imports.

1. Overview

1.1 Information in this notice

This notice explains the way VAT is charged and accounted for on movements of goods between Northern Ireland and the EU and how businesses trading under the Northern Ireland Protocol should account for VAT on goods they buy from or sell to EU member states.

1.2 Changes to this notice

Section 6 of this notice has been updated to reflect changes to the VAT treatment of distance selling between Northern Ireland and the EU with effect from 1 July 2021.

Updated to reflect changes to VAT interest that apply to VAT periods starting on or after 1 January 2023.

1.3 Who should read this notice

You should read this notice if you’re involved in the movement of goods between Northern Ireland and EU member states.

1.4 Legal status of this notice

Under, The Northern Ireland Protocol Northern Ireland aligns with EU VAT rules for the movements of goods. The Principal VAT Directive (2006/112) is the primary EU VAT law.

The UK law implementing this in Northern Ireland can be found in:

• Value Added Tax Act 1994, Schedules 9ZA and 9ZD
• VAT Regulations (Statutory Instrument 1995/2518)
• Regulations allow HMRC to specify the form and reporting requirements for EC Sales List. Some or all of paragraphs 17.10 and 17.11 contain the specifications and requirements
• Regulations permit HMRC to make conditions that have force of law

Some or all of paragraphs 4.3, 4.4, 4.5, 5.4 and 15.2.8 have force of law.

1.5 Imports and exports

The term ‘import’ is only used for goods coming into Northern Ireland from countries outside the EU. For further information on imports, see Imports and VAT (Notice 702).

The term ‘export’ is only used for goods leaving Northern Ireland to go to countries outside the EU. For information about exports, see VAT on goods exported from the UK (Notice 703).

2. VAT in the EU

2.1 Definition of the EU territory

The VAT territory of the EU is made up of 27 member states.

Find details of the EU VAT territory. For further information about the territory of the EU for Intrastat purposes, see Notice 60: Intrastat general guide.

2.2 Other areas not within the EU

Liechtenstein, the Vatican City, Andorra and San Marino are not within the EU for VAT purposes.

2.3 Status of the territories

You need to know which territories are included, or excluded from an EU member state because movement of goods between Northern Ireland and any of the:

• countries, or their included territories, are treated as EU supplies for VAT purposes
• excluded territories are treated as imported or exported goods for VAT purposes

2.4 VAT collected on goods moving between Northern Ireland and EU member states

VAT on goods traded with the EU is not collected at the frontier. The way VAT is accounted for on these supplies largely depends on whether the recipient of the supply is registered for VAT in the country of arrival. For further information see sections 3 and 6.

For these purposes movements of goods between Northern Ireland and EU member states within the same legal entity (often referred to as a transfers of own goods) are treated as supplies (see section 9). Special rules apply in the case of natural gas and electricity, along with heat and cooling (see VAT Information Sheet 21/10 Place of supply of natural gas and electricity (also heat and cooling).

2.5 VAT collected on supplies of excise goods

For information about the VAT treatment of supplies involving excise goods, see paragraph 15.4.

2.6 Trade statistics on goods moving between Northern Ireland and EU member states

The system for collecting statistics on the trade in goods within the EU is known as Intrastat. All Northern Ireland businesses carrying out trade with EU member states must declare the totals of their sales and acquisitions on their VAT Return. Businesses whose EU trade exceeds a legally set threshold have to complete additional statistical information called Supplementary Declarations. Statistics are compiled from the Supplementary Declarations and information supplied on the VAT Return.

For further information on this, see section 18 and Notice 60: Intrastat general guide.

2.7 Northern Ireland and EU member states VAT and Intrastat rules

The general rules are the same, but there may be some small variations. If you want to check the position in Northern Ireland or an EU member state you should contact the relevant VAT authority (see paragraph 2.8).

2.8 VAT in Northern Ireland and EU member states

Details of contact addresses and other useful information provided by the VAT authorities in EU member states can be found on the European Commission website.

2.9 Equivalent of ‘Value Added Tax’ and ‘VAT’ in EU member states

The equivalent in each EU member state is:

EU member state	VAT equivalent
Austria	Mehrwertsteuer (Mwst) Umsatzsteuer (Umst)
Belgium	Belasting over de Toegevoegde Waarde (BTW)Taxe sur la Valeur Ajoutée (TVA)
Bulgaria	Данък Добавена Стойност or Данък Добавена Стойност
Cyprus	Фόρος ΠροστιΘέμενης Αξίας (ΦΠΑ)
Croatia	PDV Id. Broj (PDV-1D)
Czech Republic	Daň z přidané hodnoty (DPH)
Denmark	Omsaetningafgift
Estonia	Käibemaks
Finland	Arvonlisavero (ALV)
France	Taxe sur la Valeur Ajoutée (TVA)
Germany	Mehrwertsteuer (Mwst) Umsatzsteuer (Umst)
Greece	Φόρος Προστιθέμενης Αξίας (ΦΠΑ)
Hungary	Általános Forgalmi Adó (ÁFA)
Ireland	Value Added Tax
Italy	Imposta sul valore Aggiunto (IVA)
Latvia	Pievienotãs vértîbas nodoklis
Lithuania	Pridetines vertes mokestis (PVM)
Luxembourg	Taxe sur la Valeur Ajoutée (TVA)
Malta	Value Added Tax
Netherlands	Omzetbelasting (OB) Belasting over de Toegevoegde Waarde (BTW)
Poland	Podatek od towarów i uslug
Portugal	Imposto sobre o Valor Acrescentado (IVA)
Romania	Tăxa pe valoarea adăugată
Slovakia	Daň z přidanej hodnoty (DPH)
Slovenia	Davek na dodano vrednost (DDV)
Spain	Impuesto sobre el Valor Anadidio (IVA)
Sweden	Mervardeskatt (MOMS)

2.10 Normal rules for claiming input tax

The amount you can reclaim as input tax is subject to the ‘normal rules’. These include the evidence you must get and any additional partial exemption calculations you’re required to carry out. For further information about this see dealing with input tax in the VAT guide (Notice 700) and Notice 706: partial exemption.

3. Supplies to VAT registered customers

3.1 Accounting for VAT

The normal VAT treatment of goods supplied within the EU is as follows:

• the supply in the EU member state of dispatch is zero-rated (how this applies in Northern Ireland is explained in more detail in section 4)
• VAT is due on the acquisition of the goods in the country of arrival and is accounted for by the customer on their VAT Return at the rate in force in that country (how this applies in Northern Ireland is explained in more detail in section 7)

3.2 Special rules

There are various special rules that apply in particular circumstances. These are explained in the following sections of this notice.

Section	Subject
9	Transfers of own goods
10	Temporary movements of goods
11	Installed or assembled goods
12	Processing, repair, and so on
13	Triangulation
14	Supplies to diplomatic missions, consulates, international organisations and NATO visiting forces
15	Other movements of goods

3.3 Supplies to Great Britain, the Isle of Man and the Channel Islands

Goods sent to the Isle of Man from Northern Ireland are treated the same way as supplies to Great Britain. Goods sent to the Channel Islands are treated as exports from the EU for VAT purposes. For further information about exports, see VAT Notice 703: export of goods from the UK.

3.4 Time of supply (tax point) for goods supplied to EU member states

The tax point for a supply of goods to a VAT-registered customer in an EU member state is the earlier of either the:

• 15th day of the month following the one in which you send the goods to your customer (or your customer takes them away)
• date you issue a VAT invoice for the supply

3.5 Tax point for your supplies

You should use the tax point as the reference date for including the supplies on your VAT Return, EC Sales Lists and, normally, your Intrastat Supplementary Declarations.

But if it’s more convenient, you may use the calendar month during which the goods arrive in, or are dispatched from Northern Ireland for your Intrastat Supplementary Declaration, see Notice 60: Intrastat general guide.

3.6 Payments received in advance of an invoice or delivery

The receipt of a payment in these circumstances does not create a tax point for your EU supply. But you must issue a VAT invoice to your customer for the amount paid to you (see paragraph 16.8) and the date of issue of the VAT invoice will be the tax point.

Where you issue a series of invoices relating to the same supply of goods, the time limit for getting valid evidence of removal begins from the date of the final invoice (see paragraph 4.4).

3.7 Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)
Goods supplied to VAT-registered customers in EU member states where zero rating conditions in paragraph 4.3 are met. (Supplies may be zero-rated.)	Boxes 6 and 8 – value of supply	Yes – customer’s VAT number and value of supply	Yes – as a dispatch (value of supply)
Goods supplied to customers in EU member states where zero rating conditions in paragraph 4.3 are not met. (UK VAT charged at appropriate rate, but see paragraph 6.4 about distance selling.)	Box 1 – output tax* and 6 - value of supply (*see paragraph 16.9 in cases where the time limits for removal and getting evidence are not met)	No	Yes – as a dispatch. See paragraph 6.17 for distance sales and Notice 60: Intrastat general guide.

3.8 Goods that are lost, destroyed or stolen

As the supplier your liability to account for VAT depends on the circumstances.

Where goods are lost, destroyed or stolen and this occurs	then
in Northern Ireland before you have supplied them (for example, whilst in storage awaiting delivery or collection)	if there has been no supply, no VAT is due
while being transported in Northern Ireland by either you or your customer	VAT is due unless you hold evidence of loss, destruction or theft (for example, an insurance claim or police investigation)
while being transported outside Northern Ireland by either you or your customer	the goods may continue to be zero-rated (see paragraph 4.3) provided you have valid proof of removal of the goods from Northern Ireland and the VAT registration number of your customer. (Your customer may still be liable to account for acquisition tax. Also there may be additional VAT liabilities if the loss, destruction or theft occurs en route through an EU member state. In that event you should check on the position with the VAT authority in the EU member state concerned – see paragraph 2.8).

4. Zero-rated supplies to VAT-registered customers in an EU member state

4.1 EU law covered by this section

Article 138 of the Principle VAT Directive (2006/112/EC) states that EU member states shall exempt certain supplies subject to conditions (Article 131) laid down for the purpose of ensuring the correct and straightforward application of such exemptions (zero rating) and preventing any evasion, avoidance or abuse. UK uses the term ‘zero rating’ rather than ‘exemption’ used in EU law to avoid confusion with the use of exemption elsewhere in UK law.

4.2 UK law on removals

UK VAT law relating to the zero rating of removals of goods for VAT purposes can be found in the Value Added Tax Act 1994, Schedule 9ZA and regulations in the Value Added Tax Regulations 1995.

4.3 Zero-rated supply of goods

Regulations provide that a supply from Northern Ireland to a customer in an EU member state is liable to the zero rate where:

• your customer is VAT registered in an EU member state and has notified you of that VAT number
• the goods are sent or transported out of Northern Ireland to a destination in an EU member state
• you must submit an EC Sales List accurately accounting for the supply

Paragraph 4.6. explains what will happen if the conditions are not met.

A supply can be zero-rated at the time of the supply and in advance of the completion and submission of the relevant EC Sales List.

The VAT number of the customer does not need to have been issued by the member state to which the goods are sent but please read paragraphs 7.7 to 7.9 of this notice, which explains the fall-back rule.

If you deliver to a Northern Ireland address or your customer collects the goods from your premises, then please read the guidance in paragraph 4.7.

You should show the customer’s EU VAT registration number notified to you on your VAT sales invoice, including the 2-letter country prefix code.

Paragraph 4.9 covers the checks that you must undertake to make sure that your customer’s EU VAT number is valid.

You must not zero rate a sale, even if the goods are subsequently removed to an EU member state, if you supply the goods to a UK VAT registered customer unless that customer is also registered for VAT in an EU member state and the conditions are met.

The following sentence is a condition that has force of law. You must get and keep valid evidence (section 5) that the goods have been removed from Northern Ireland within the time limits set out at paragraph 4.4

4.4 Time limits for removal of goods and evidence of removal

The following paragraph has force of law.

Where goods are removed from Northern Ireland and the call-off stock conditions are met paragraph 15.2 , the time limit for getting valid evidence of removal is 3 months from the time the goods leave Northern Ireland.

If the supply is New Means of Transport (NMT) to a business registered for VAT in the EU the NMT must be removed within 2 months of supply.

In all other cases the time limits for removing the goods and getting valid evidence of removal will begin from the time of supply. For goods removed to an EU member state the time limits are:

• 3 months (including supplies of goods involved in groupage or consolidation prior to removal)
• 6 months for supplies of goods involved in processing or incorporation prior to removal

4.5 Goods removed to customers in EU member states after processing or incorporation

When you make a supply of goods to a VAT-registered customer in an EU member state, but have to deliver them to a third person in Northern Ireland who’s also making a taxable supply of goods or services to that customer, you can zero rate the supply provided you meet the following conditions:

The following 11 bullet points have force of law.

• you must meet the conditions of paragraph 4.3, which have force of law
• the goods are only being delivered and not supplied to the third person in Northern Ireland
• no use is made of the goods other than for processing or incorporation into other goods for removal, and

and your records show:

• the name, address and VAT number of the customer in the EC
• the invoice number and date
• the description, quantity and value of the goods
• the name and address of the third person in Northern Ireland to whom the goods were delivered
• the date by which the goods must be removed
• proof of removal obtained from the person responsible for transporting the goods out of Northern Ireland, and
• the date the goods were actually removed from Northern Ireland
• the goods you supplied have been processed or incorporated into the goods removed from Northern Ireland

In cases where the third person is not in Northern Ireland but in an EU member state, the same conditions will generally apply to allow you to zero rate your supply.

4.6 If you cannot meet the conditions

(What to do if you cannot meet all the conditions in paragraphs 4.3, 4.4 or 4.5.)

If you cannot meet the conditions you must charge and account for tax at the appropriate UK rate.

If the goods are not removed or you do not have the evidence of removal within the time limits you must account for VAT as described in paragraph 16.11. No VAT is due on goods which would normally be zero-rated when supplied in the UK. Paragraph 16.12 explains what to do if you subsequently meet the conditions.

If you fail to meet the requirements (without reasonable excuse – paragraph 17.13) to obtain the customer’s VAT number or to submit an accurate EC Sales List, then zero rating is not permitted and is liable to be revoked from the due date of the EC Sales List. See paragraph 16.11.

4.7 If your customer arranges for the removal of the goods

If your customer arranges to collect the goods, or you deliver the goods to premises in Northern Ireland you should agree with your customer what evidence of removal will be provided to you and when. You may wish to consider taking a deposit for the VAT (see paragraph 5.5) if you have reason to doubt that the goods will be removed.

Extra caution may be advisable if your customer:

• is not previously known to you
• pays in cash
• purchases types or quantities of goods inconsistent with their normal commercial practice

4.8 How to get your EU customer’s VAT registration number

You should carry out normal commercial checks such as bank and trade credit worthiness references before you start making supplies to an EU customer. As part of these checks you should ask your customer to supply you with their EU VAT number in writing. You should keep the letter or advice you’ve had from your customer for future reference because one of the conditions for zero rating your supply is that you hold a valid EU VAT number for your customer.

For further information on normal commercial checks, see Joint and several liability for unpaid VAT (Notice 726).

4.9 How to make sure your EU customers give you their VAT registration numbers

When you write to your customer, ask them to provide you with the number which has been allocated to them for EU trade. In certain EU countries businesses are required to register their VAT number for intra-EU use and if they do not do this, the number will show as invalid on the Europa website. If they do not supply you with their VAT number then you’re obliged to charge UK VAT on any supplies of goods.

4.10 Checking the validity of an EU customer’s VAT registration number

You should check the validity of the number you have been given by making sure it follows the format at paragraph 16.18. Further checks on the validity of a customer’s number should be made using the Europa website.

All EU member states share these arrangements, as does the UK in respect of Northern Ireland, and businesses in EU member states can similarly verify the VAT registration number of a UK business identified as operating under the Northern Ireland protocol in the same way.

When making an enquiry on the Europa website you must identify yourself by entering your own VAT registration number and record of the date and time that the enquiry was made and the result of the enquiry. You must also regularly check your EU customer’s VAT registration number to make sure that the details are still valid and that the VAT registration has not been recently cancelled.

Alternatively you can contact the VAT: general enquiries helpline to validate your customer’s VAT registration number and to verify that the name and address is correct.

4.11 If your customer’s VAT number turns out to be invalid

If it later turns out that the customer’s number was invalid, for example, a tax authority’s database was not up to date, the validation record will help show your compliance with the rules in the event that any VAT fraud and revenue losses occurred.

You do not have to account for VAT, but only if you have genuinely done everything you can to check the validity of the VAT number, can demonstrate you have done so, have taken heed of any indications that something might be wrong and have no other reason to suspect the VAT number is invalid.

4.12 The meaning of ‘reasonable steps’

HMRC does not expect you to go beyond what’s reasonable, but will be seeking to identify what actions you took to check the validity of your customer’s EU VAT registration number. This will focus on the due diligence checks you undertook and, most importantly, the actions taken by you in response to the results of those checks.

We would consider ‘reasonable steps’ to be, you genuinely doing everything you can to check the integrity of the VAT registration number, being able to demonstrate you have done so and taking heed of any indications that the number may be invalid.

Some examples of not having taken ‘reasonable steps’ would be using a VAT number:

• that does not conform to the published format for your customer’s EU member state as shown in paragraph 16.18
• that you have not regularly checked using the Europa website or with HMRC
• which you’ve already been told is invalid
• which you know does not belong to your customer

4.13 If reasonable steps are not taken

VAT will be chargeable if we do not consider you’ve taken reasonable steps. You’ll have to account for VAT at the appropriate UK rate.

4.14 Supplies of freight containers

The supply of a container for removal to an EU member state is treated as the removal of goods and the treatment follows the general EU rules. The lease or hire of a container is a supply of services and you will need to refer to the rules set out in Notice 741A: place of supply of services.

The temporary movement of containers from Northern Ireland to EU member states (whether involved in transporting goods or where the container is on lease or hire to other customers) is not treated as a removal from Northern Ireland with a subsequent acquisition in the destination member state. But, you’ll need to keep commercial evidence that the containers have left the UK and have later returned. In the case of a temporary movement of a container, you will need to make an entry in your Register of Temporary Movements.

5. Evidence of removal of goods

5.1 Overview

Paragraph 4.3 (which has force of law) includes a requirement that you get and keep valid commercial evidence to show that the goods have been removed from Northern Ireland within the time limits set out at paragraph 4.4.

Article 45a of Council Implementing Regulation 282/2011 sets out the conditions under which the goods can be presumed to have been removed. The Implementing Regulation is directly applicable, so no further legislation is required to implement it into UK law.

Paragraph 5.2 sets out the ‘presumption’ rules.

Businesses which have difficulty gathering the information required can continue to rely on the rules set out in the rest of this section.

5.2 Presumption of removal

The effect of the rules is that, where the conditions are met, it is presumed that the goods have been transported from Northern Ireland. This presumption can be challenged by HMRC. If the relevant conditions are met, it is for HMRC to prove that the goods have not been transported from Northern Ireland.

The presumptions are met where the supplier arranges for the transport of the goods and is in possession of one of the following issued by 2 different parties that are independent of each other, of the vendor, and of the acquirer:

• at least 2 items of non-contradictory acceptable evidence from list A
• any single item from list A together with any single item of non-contradictory acceptable evidence from list B

Where the acquirer arranges the transport of the goods, the supplier must be in possession of a written statement from the acquirer, stating that the goods have been dispatched or transported by the acquirer, or by a third party on behalf of the acquirer, and identifying the destination member state of the goods.

That written statement should state:

• the date of issue
• the name and address of the acquirer
• the quantity and nature of the goods
• the date and place of the arrival of the goods
• in the case of the supply of means of transport, the identification number of the means of transport
• the identification of the individual accepting the goods on behalf of the acquirer

The statement must be provided by the 10th day of the month following the supply.

Acceptable evidence

List A: Documents relating to the dispatch or transport of the goods, such as:

• a signed CMR document or note
• a bill of lading
• an airfreight invoice
• an invoice from the carrier of the goods

List B: The following documents:

• an insurance policy with regard to the dispatch or transport of the goods or bank documents proving payment for the dispatch or transport of the goods
• official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the destination member state
• a receipt issued by a warehouse keeper in the destination member state, confirming the storage of the goods in that member state

5.3 Evidence of removal

A combination of these documents must be used to provide clear evidence that a supply has taken place, and the goods have been removed from Northern Ireland:

• the customer’s order (including customer’s name, VAT number and delivery address for the goods)
• inter-company correspondence
• copy sales invoice (including a description of the goods, an invoice number and customer’s EU VAT number)
• advice note
• packing list
• commercial transport documents from the carrier responsible for removing the goods from Northern Ireland, for example an International Consignment Note (CMR) fully completed by the consignor, the haulier and signed by receiving consignee
• details of insurance or freight charges
• bank statements as evidence of payment
• receipted copy of the consignment note as evidence of receipt of goods abroad
• any other documents relevant to the removal of the goods in question which you would normally get in the course of your EU business

Photocopy certificates of shipment or other transport documents are not normally acceptable as evidence of removal unless authenticated with an original stamp and dated by an authorised official of the issuing office.

5.4 What to show on documents used as proof of removal

The following paragraph including bullet points has force of law.

The documents you use as proof of removal must clearly identify the following:

• the supplier
• the consignor (where different from the supplier)
• the customer
• the goods
• an accurate value
• the mode of transport and route of movement of the goods, and
• the EU destination

Vague descriptions of goods, quantities or values are not acceptable. For instance, ‘various electrical goods’ must not be used when the correct description is ‘2,000 mobile phones (make ABC and model number XYZ2000)’. An accurate value, for example, £50,000 must be shown and not excluded or replaced by a lower or higher amount.

If the evidence is found to be unsatisfactory you as the supplier could become liable for the VAT due.

5.5 Evidence of removal of goods to the Republic of Ireland across the Irish Land Boundary

The evidence you get must clearly show that the goods have left Northern Ireland. The types of documentary evidence required are explained in paragraphs 5.3 and 5.4. See paragraph 5.7 for advice when goods are collected by your customer. Depending on the circumstances of the removal, we recommend that you get the following types of evidence to meet the conditions for zero rating.

If the goods are	Then commercial evidence should include
removed by road by an independent carrier	a copy of the carrier’s invoice or consignment note, supported by evidence that the goods have been delivered to a destination in the Republic of Ireland (for example, a receipted copy of the consignment note)
removed by rail	the consignor’s copy of the consignment note signed by the railway official accepting the goods for delivery to your customer
removed in your own transport	a copy of the delivery note showing your customer’s name, address, EU VAT number and actual delivery address in the Republic of Ireland if different, and a signature of your customer, or their authorised representative, confirming receipt of the goods
collected by your customer or their authorised representative	a written order completed by your customer, which shows their name, address, EU VAT number, the name of the authorised representative collecting the goods, the address in the Republic of Ireland where the goods are to be delivered, the vehicle registration number of the transport used, and a signature of your customer, or their authorised representative, confirming receipt of the goods

Where you sell a motor vehicle, which is collected by your customer or their representative, it may be difficult to get satisfactory evidence of removal from Northern Ireland. In these circumstances, a copy of the vehicle registration document issued by the authorities in the Republic of Ireland will normally provide satisfactory evidence of removal if supported by other evidence described in paragraph 5.3 and paragraph 5.5.

5.6 If you deliver the goods to your customer in an EU member state

In addition to the examples of acceptable documents relating to the sale listed in paragraph 5.3, travel tickets can also be used to demonstrate that a Northern Ireland-EU journey took place for the purpose of removing the goods from Northern Ireland.

5.7 If your customer collects the goods or arranges for their collection and removal from Northern Ireland

If your VAT-registered EU customer is arranging removal of the goods from Northern Ireland it can be difficult for you as the supplier to get adequate proof of removal as the carrier is contracted to your EU customer. For this type of transaction the standard of evidence required to substantiate VAT zero rating is high.

Before zero rating the supply you must ascertain what evidence of removal of the goods from Northern Ireland will be provided. You should consider taking a deposit equivalent to the amount of VAT you would have to account for if you do not hold satisfactory evidence of the removal of the goods from Northern Ireland. The deposit can be refunded when you get evidence that proves the goods were removed within the appropriate time limits.

Evidence must show that the goods you supplied have left Northern Ireland. Copies of transport documents alone will not be sufficient. Information held must identify the date and route of the movement of goods and the mode of transport involved. It should include the following.

Item	Description
1	Written order from your customer which shows their name, address and EU VAT number and the address where the goods are to be delivered
2	Copy sales invoice showing customer’s name, EU VAT number, a description of the goods and an invoice number
3	Date of departure of goods from your premises and from Northern Ireland
4	Name and address of the haulier collecting the goods
5	Registration number of the vehicle collecting the goods and the name and signature of the driver and, where the goods are to be taken out of Northern Ireland by a different haulier or vehicle, the name and address of that haulier, that vehicle registration number and a signature for the goods
6	Route, for example, Channel Tunnel, port of exit
7	Copy of travel tickets
8	Name of ferry or shipping company and date of sailing or airway number and airport
9	Trailer number (if applicable)
10	Full container number (if applicable)
11	Name and address for consolidation, groupage, or processing (if applicable)

5.8 How long to keep your evidence of removal

You must make sure that the proof of removal is:

• kept for 6 years
• made readily available so that any VAT assurance officer is able to substantiate the zero rating of your removals

5.9 Using an agent

You, as the supplier of the goods, or your customer can appoint a freight forwarder, shipping company, airline or other person to handle your EU supplies and produce the necessary evidence of removal.

But you remain legally responsible for ensuring that the conditions for zero rating supplies of goods to EU member states, as set out in paragraphs 4.3, 4.4 and 4.5, are met. This includes getting and holding evidence of removal of the goods from Northern Ireland.

5.10 Groupage or consolidation transactions

If you use a freight forwarder, consignments (often coming from several consignors) may be aggregated into one load, known as groupage or consolidation cargo. The freight forwarder must keep copies of the original bill of lading, sea waybill or air waybill, and all consignments in the load must be shown on the container or vehicle manifest.

You’ll be issued with a certificate of shipment by the freight forwarder, often supported by an authenticated photocopy of the original bill of lading, a sea waybill or a house air waybill.

Where such consignments are being removed, the forwarder may be shown as the consignor in the shipping documents.

(a) Certificate of shipment

Certificates of shipment are usually produced by packers and consolidators involved in road, rail and sea groupage consignments when they themselves receive only a single authenticated transport document from the carrier. It’s an important document, which should be sent to you as soon as the goods have been removed from Northern Ireland.

The certificate of shipment must be an original and authenticated by an official of the issuing company unless it is computer produced, on a once-only basis, as a by-product of the issuing company’s accounting system. A properly completed certificate of shipment will help you to meet the evidential requirements described in paragraph 5.3.

(b) Information

Although the certificate of shipment can be in any format, it must be an original and will usually contain the following information:

• the name and address of the issuing company
• a unique reference number or issuer’s file reference
• the name of the supplier of the goods (and VAT number if known)
• the place, port or airport of loading
• the place, port or airport of shipment
• the name of the ship or the aircraft flight prefix and number
• the date of sailing or flight
• the customer’s name
• the destination of the goods
• a full description of the goods removed to an EU member state (including quantity, weight and value)
• the number of packages
• the supplier’s invoice number and date if known
• the bill of lading or airway bill number (if applicable)
• the identifying number of the vehicle, container or railway wagon

5.9 Postal services

Goods sent by post may be zero-rated if they’re sent directly to your customer registered for VAT in an EU member state, and you hold the necessary evidence of posting. The receipted forms described, plus the Parcelforce Worldwide statement of account or parcel manifest listing each parcel or multi-parcel, will provide evidence of removal.

Letter post or airmail

A fully completed certificate of posting form presented with the goods and stamped by the Post Office. Acceptable forms are:

• form C&E132 for single or multiple packages taken to the Post Office
• form P326 available from the Post Office and used for single packages taken to the Post Office, or a Certificate of Posting for international mail only, or a Royal Mail Collection Manifest, available from a Royal Mail sales adviser, for use by customers using their Business Collections Service, where the Royal Mail collection driver signs the certificate

You can find further information on Parcelforce Worldwide international services.

Parcels

Parcelforce Worldwide operates a range of international parcel services. If you use any of these services you will be provided with:

• a service specific barcoded label
• a customs export declaration (for non-EU destinations only)
• a copy of the Parcelforce Worldwide conditions of carriage
• a printed receipt, which is your proof of shipment for all destinations

An individual barcode label must be affixed to every parcel. You do not need to complete the customs export declaration for goods being sent to an EU member state.

If you arrange for the parcel to be collected from your premises the collecting driver will sign your printed receipt. This is your proof of shipment for EU destinations.

If the parcel is taken to a Post Office, the counter clerk will provide you with a printed proof of shipment from the Post Office SmartPost system. This will show the overseas delivery address, date of dispatch and unique consignment number. You should keep this printed proof of shipment as your evidence of removal.

In addition to the individual parcel declarations, account customers of Parcelforce Worldwide have 2 further potential sources of information listing multiple parcel dispatches. These are:

• Worldwide Dispatch manager (WDM) – online users can print a manifest which lists all dispatched parcels
• a Statement of Account

All of the individual parcel declarations, plus either the manifest or the statement of account listing each dispatch will provide proof of removal for VAT purposes.

You can find further information on Parcelforce Worldwide international services.

5.12 Couriers and fast parcel services

Courier and fast parcel operators specialise in the shipment of goods to overseas destinations within guaranteed timescales.

(a) Operators who do not issue separate certificates of shipment

Most courier and fast parcel operators do not issue separate certificates of shipment. The invoice for moving goods from Northern Ireland, which bears details of the unique airway bill numbers for each shipment, represents normal commercial evidence of removal. In addition, many express companies are able to offer a track and trace service on their websites where the movement of goods can be traced through to the final destination. This information can be used to confirm removal from Northern Ireland.

(b) Operators who use the system based upon a dispatch pack

A few companies still use a documentary system based upon a dispatch pack containing accounting data, a customs export declaration and receipt copies of the relevant house airway bill or consignment note. These packs are issued to customers to complete for each removal from Northern Ireland.

An export declaration does not need to be completed for goods being sent to an EU member state but a dispatch pack must be completed for each overseas address and consignee. The driver collecting the parcels will endorse the receipt copy and return it to the consignor. This, plus the statement of account listing each removal, will provide evidence of removal from Northern Ireland.

(c) Use of more than one courier or fast parcel company

Due to the complexities of the movement of goods within the courier or fast parcel environment, there is often more than one company involved in the handling and ultimate removal of the goods. Ultimately, you as the supplier may not be certain as to which courier or fast parcel company has removed the goods. If you’re aware that this may happen you will need to establish what proof of removal you will receive from the company to whom you give your goods. The proof available is described in (a) and (b).

(d) Overseas customer arranging the removal by courier

If your EU customer arranges for the goods to be removed by courier you should ascertain what proof of removal they will be providing to allow you to zero rate the supply. You should consider taking a deposit equivalent to the amount of VAT you would have to account for if you do not hold satisfactory evidence of the removal of the goods from Northern Ireland. The deposit can be refunded when you get evidence that proves the goods were removed within the appropriate time limits.

6. Supplies to customers (including private individuals) who are not registered for VAT

6.1 Accounting for VAT

For supplies to non-taxable persons VAT is normally accounted for by the supplier as a domestic supply where the goods are dispatched from. Non-taxable person includes private individuals, public bodies, charities and businesses which are not VAT-registered because their turnover is below the registration threshold or whose activities are entirely exempt.

6.2 Tax point for supplies where UK VAT is chargeable

As a domestic supply, liable to UK VAT, the normal tax point rules apply. For further information about the normal rules, see the sections dealing with time of supply in the VAT guide (Notice 700).

6.3 Special arrangements for supplies of goods to consumers

Special arrangements apply to the following:

• supplies to non-taxable persons of new means of transport including boats, aircraft and motor vehicles (for further information, see VAT on new means of transport (Notice 728))
• supplies of excise goods for private purposes (for further information see paragraph 15.4)
• distance sales (for further information see paragraph 6.4 and VAT Notice 700/1: should I be registered for VAT?)
• purchases by exempt bodies and non-taxable organisations (for further information about how this can make the purchaser liable to register for VAT, see VAT Notice 700/1: should I be registered for VAT?)

6.4 Distance selling

Distance selling occurs when a taxable person in Northern Ireland or an EU member state supplies and delivers (or facilitates the delivery of) goods across an EU border to a non-taxable person (Business to Consumer (B2C)). The most common examples of distance sales are goods supplied by mail order or ordered over the internet.

6.5 How to treat distance sales from Northern Ireland to EU member states

(a) Accounting for VAT

Businesses registered for VAT in the UK and which make distance sales from Northern Ireland should tell HMRC that they are as trading under the Northern Ireland Protocol.

If you make distance sales from Northern Ireland you should charge UK VAT until:

• the value of your supplies in a calendar year exceed the distance selling threshold of £8818 (€10,000) in respect of goods
• you exercise the option described in paragraph 6.10

Once the value of your distance sales exceeds this threshold, you’ll be liable to register and account for VAT in all EU member states where you make supplies to (see paragraph 2.8). The threshold test is set out in paragraph 6.6.

(b) One Stop Shop (OSS)

To simplify the reporting of distance sales you will be able to submit a single quarterly return and payment for all your sales to the EU through an optional online portal. This will mean you do not need to register for VAT in every member state you make supplies to.

Further information on registering for and using the OSS can be found in Register to report and pay VAT on distance sales of goods from Northern Ireland to the EU.

(c) Intrastat

If you trade above the Intrastat threshold you must report your distance sales to all non-taxable persons on your Intrastat Supplementary Declaration, even when your distance sales from Northern Ireland are below the distance selling threshold in the EU member states of arrival. For further information, see Notice 60: Intrastat general guide.

6.6 Distance selling threshold for each EU member state

From 1 July 2021 the pan-EU threshold is £8818 (€10,000). The £8818 is the total value of sales made to customers throughout the EU.

6.7 Distance sales of excise goods

If you make any distance sales of any excise goods (alcohol and tobacco) to an EU member state you’ll be required to register and account for VAT in that EU member state, irrespective of the value involved.

6.8 Records of distance sales to each EU member state

You must keep a separate record of your distance sales to EU member states. This will allow you to monitor any liability to register for VAT on your distance sales in the destination EU member states, or for the OSS.

6.9 Appoint someone to act on your behalf in an EU member state

If you register in an EU member state, you may need to appoint someone to act on your behalf there. You should check this with the relevant VAT authority (see paragraph 2.8). Alternatively, you may register for the OSS.

6.10 Opting to account for VAT on supplies in the EU member state to which the goods are sent

If your distance sales of goods are below the pan-EU threshold you may, nevertheless, opt to register and account for VAT on the sales in that state or through the OSS.

6.11 How to exercise the option

If you decide to exercise the option you must notify HMRC by writing to the appropriate written enquiries team and either:

• apply for VAT registration with the VAT authority for the EU member state to which the goods are sent
• register for the OSS

You will then be subject to, and must comply with, the VAT rules in the EU member state or of the OSS.

6.12 UK VAT accounting

Once you are required to or have taken up the option to account for VAT as a distance sale, you’ll no longer charge UK VAT on the goods covered by the option.

6.13 When you can cancel the option

You’ll normally be required to remain registered for at least 2 calendar years from the date of registration. After this time, if the value of your supplies remains below the threshold and you decide to cancel your option, you must notify HMRC by writing to the appropriate written enquiries team. This should not be less than 30 days before the date of the first supply you intend to make after the cancellation. Once cancelled you will restart accounting for UK VAT as before.

6.14 What to do if you’re required to register for VAT in an EU member state

The registration requirements in each EU member state vary. If you’re required to register for VAT in an EU member state, you must notify the appropriate VAT authority (see paragraph 2.8). You’re responsible for making sure that you register at the correct time and that you account for tax to the correct VAT authority. Alternatively you can register for the OSS.

6.15 Distance selling rules and group registrations

Group treatment Notice 700/2 is a facility which allows 2 or more corporate bodies controlled by the same person, to account for VAT as a single VAT registration. Although each VAT group member is, and remains, a legal entity in its own right, it’s treated as a single taxable person in the UK. But UK VAT groups are not recognised in EU member states.

Group members must therefore individually monitor the value of their own distance sales. Where the value of sales in a calendar year exceeds a pan-EU distance selling threshold, that group member will be liable to register in their own right.

A group member is entitled to exercise the option described at paragraph 6.10.

6.16 What to do if you’re making distance sales into Northern Ireland

From 1 July 2021 distance sales of goods into Northern Ireland will count towards the pan-EU threshold of £8818 (€10,000) and you will be liable to register and account for UK VAT on all these sales.

Prior to 1 July 2021 if you made distance sales to Northern Ireland, and the value of these sales in a calendar year exceeded the UK threshold of £70,000, you would have been liable to register for VAT in the UK.

But any supplies involving goods subject to Excise Duty are not subject to the threshold and you must register for VAT immediately you make a supply of this kind. You can also register voluntarily if you notify your home authorities see paragraph 6.10.

For more information about registering for VAT in the UK for distance sales into Northern Ireland, see VAT Notice 700/1: should I be registered for VAT.

6.17 Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Distance sales from Northern Ireland below the pan-EU threshold	Box 1 – output tax. Box 6 – value of supply	No	Yes – as a dispatch (use VAT exclusive value). (See Notice 60: Intrastat general guide)	Treated as a domestic supply for VAT purposes, but must still be declared on your Supplementary Declaration
Distance sales from Northern Ireland on or above the pan-EU threshold in the EU member state of arrival (or where option to register there has been exercised – see paragraph 6.10)	Boxes 6 and 8 – value of supply	No	Yes – as a dispatch (value of supply)	Although VAT is chargeable on the supply in the EU member state of the arrival, the value must still be declared on your UK VAT Return or through the OSS, and Supplementary Declaration
Distance sales to Northern Ireland above the pan-EU threshold (or where option to register here has been exercised, see paragraph 6.16)	Box 1 – output tax Box 6 – value of supply	No	Yes – as an arrival (value of supply) if the Intrastat threshold for arrivals has been exceeded. (See Notice 60 Intrastat General Guide for details of the current Intrastat threshold)	Treated as a supply in UK and supplier required to register here, or account for the VAT through the OSS
Distance sales to Northern Ireland below UK distance selling threshold	No	No	No	No

7. Northern Ireland acquisition of goods from an EU member state

7.1 The definition of an ‘acquisition’

An acquisition in Northern Ireland occurs where:

• there’s a movement of goods from an EU member state to Northern Ireland
• the goods are received by a VAT-registered business
• the supplier is registered for VAT in the EU member state of departure

In which case the recipient is required to account for VAT on the goods acquired into Northern Ireland.

7.2 Account for acquisition tax in Northern Ireland

You must account for any tax due on your VAT Return for the period in which the tax point occurs (see paragraph 7.3) and you may treat this as input tax on the same VAT Return subject to the normal input tax deduction rules (see paragraph 2.13).

7.3 Time of acquisition

The time of acquisition is the earlier of either the:

• 15th day of the month following the one in which the goods were sent to you
• date your supplier issued their invoice to you

7.4 Rate of VAT on acquisitions into Northern Ireland

Acquisitions are liable at the same rate as domestic supplies of identical goods in the UK. So, for example, no tax is due on acquisitions of goods which are currently zero-rated in the UK.

7.5 Account for acquisition tax if you make a part or full payment for the goods

Part or full payment for an EU supply of goods does not create a tax point for the acquisition.

7.6 What to do if your supplier sends you an invoice for the amount you paid

You should account for the acquisition tax, provided the date of issue of the invoice is earlier than the 15th day of the month following the one in which the goods were sent to you.

7.7 Where acquisition tax is due

The VAT on an acquisition is always due in the place (Northern Ireland or EU member state) where the goods are physically received. But there’s a ‘fallback’ provision that applies where the VAT registration number quoted to the supplier to secure zero rating has been issued by a different tax authority. In that event the acquisition tax must be accounted for in the place of VAT registration used, but the customer also remains liable to account for acquisition VAT in the place to which the goods have physically been sent.

7.8 Account for acquisition tax whenever you give your UK VAT number identifying you as trading/operating under the Protocol to an EU supplier

You’re liable to account for acquisition tax in the UK unless you can demonstrate that you have already accounted for acquisition VAT in the EU member state to which the goods were dispatched where this is different (see paragraph 7.7). Acquisition tax accounted for under the ‘fallback’ is not deductible as input tax in any circumstance.

7.9 Refund of UK acquisition tax if VAT is also accounted for in the EU member state of physical arrival of the goods

You can get a refund of any UK acquisition tax accounted for in the circumstances described in paragraph 7.8.

7.10 Changes to your VAT registration

It’s in your own interest to let us know of changes to your business details. This allows us to make sure that our records and the Europa website are kept up to date at all times. We can also reply correctly and without delay to any enquiries made about your registration number.

If you acquire goods from EU member states you will need to inform your suppliers of any changes to your VAT registration number. Otherwise they’ll have to charge you VAT on their supplies.

7.11 Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Acquisitions of goods from VAT-registered suppliers in EU member states	Box 2 – acquisition VAT for goods positive-rated in UK Box 4 – input tax subject to normal rules (see paragraph 2.13 Boxes 7 and 9 – value of acquisition	No	Yes – as an arrival (value of supply)	You must provide your EU supplier with your VAT number to quote on the sales invoice

8. Tax value of acquisitions

8.1 Calculating the amount of tax due on an acquisition

The amount of tax due on an acquisition is the tax value multiplied by the appropriate VAT rate. The tax value is normally what you paid for the goods and is also called the ‘consideration’. VAT Guide Notice 700 gives for further information on calculating the consideration.

8.2 What to do if the value of your acquisition is in a foreign currency

Where the value of your acquisition is in a foreign currency, you should convert it to sterling using the rules in VAT Guide Notice 700, paragraph 7.6, which has force of law.

8.3 Include any excise duty in the tax value of an acquisition

For goods subject to excise duty or, in the case of EU accessionary states, customs duty or agricultural levy, the value of the acquisition is the value determined according to the principles outlined in Notice 700 plus the duty or levy arising from the removal to Northern Ireland.

9. Transfers of own goods between Northern Ireland and EU member states

9.1 Position if you transfer your own goods

A transfer of your own goods from Northern Ireland to an EU member state within the same legal entity, for example between branches of the same company, is deemed to be a supply of goods for VAT purposes.

9.2 Supply liable to VAT

The transfer of your own goods is liable to VAT in the same way as other EU supplies of goods described in this notice.

9.3 Zero-rated supply

The supply may be zero-rated subject to the conditions in paragraph 4.3.

9.4 Acquisition tax

You’ll normally be liable to account for acquisition VAT in the EU member state to which the goods are transferred.

9.5 Register for VAT in the EU member state to which the goods are sent

You may need to register for VAT in the EU member state to which the goods were dispatched in order to meet your obligations to account for acquisition tax and also to account for VAT if you subsequently supply the goods there. You’ll also be able to use that VAT registration number to support zero rating of the deemed supply from Northern Ireland (see paragraph 4.3).

9.6 What to do if you’re not registered in the EU member state to which the goods are sent

If you are not registered for VAT in the EU member state to which you transfer your own goods, you should treat the supply as a domestic supply (see paragraph 6.1). You must account for VAT on the transfer at the appropriate UK rate.

9.7 Register for VAT in the UK if you transfer your own goods from an EU member state

This will depend on whether you exceed the UK VAT registration thresholds. For further information about registering for VAT in the UK, see VAT Notice 700/1: should I be registered for VAT?. You will also need tell HMRC that you are trading or operating under the Northern Ireland Protocol.

9.8 Exceptions to the rule

There are some exceptions which are covered in sections 10 and 11.

9.9 Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Transfers from Northern Ireland to EU member states	Boxes 6 and 8 – value based on cost of goods	Yes – value based on cost of goods	Yes – as a dispatch (value based on cost of goods)	A deemed supply in the UK. It may be zero-rated subject to the conditions in paragraph 4.3
Transfers from EU member states to Northern Ireland	Box 2 – acquisition VAT for positive-rated goods in UK Box 4 – input tax subject to normal rules (see paragraph 2.10) Boxes 7 and 9 – value based on cost of goods	No	Yes – as an arrival (value based on cost of goods)	There’s an acquisition into Northern Ireland by the owner of the goods

10. Temporary movement of goods

10.1 Temporary movements of goods treated as a transfer of your own goods

The following temporary movements are not treated as deemed supplies of goods as described in section 9:

• goods transferred temporarily to an EU member state in order to make a supply of services there provided all of the conditions at paragraph 10.2 are met
• goods transferred to an EU member state for temporary use there provided all of the conditions at paragraph 10.4 are met

In each case no acquisition VAT is due in the EU member state to which the goods are transferred.

10.2 Conditions for the temporary movement of goods used to make a supply of services

You must meet all of the following conditions:

1. You do not have a place of business in the EU member state to which the goods are temporarily transferred.
2. You have a specific contract to fulfil.
3. You intend to return the goods to the EU member state from which they were dispatched.

10.3 Circumstances this might apply

This can apply to your tools and equipment which you take to an EU member state (or bring to Northern Ireland) to use there, for example to repair or service machinery. It also applies to goods that are loaned or leased to somebody.

10.4 Conditions for goods transferred for temporary use

You must meet both of the following conditions:

• the goods would be eligible for temporary importation relief if they were imported from outside the EU
• they’re to remain in the EU member state (or Northern Ireland) for no longer than 2 years

10.5 Goods eligible for temporary import relief

For further information about this, see Notice 3001: customs special procedures for the Union Customs Code.

10.6 If circumstances change

The conditions described at paragraphs 10.2 or 10.4 may later cease to be met (for example, in the case of paragraph 10.2, where the goods are disposed of locally rather than returned to Northern Ireland or, in the case of paragraph 10.4, they are to remain in an EU member state for more than 2 years). In that event the original movement should be treated belatedly as a deemed supply and acquisition, as described in section 9.

10.7 Evidence of removal and return to Northern Ireland

Although these transfers of your own goods are not treated as supplies for VAT purposes, you still need commercial evidence that the goods left Northern Ireland and have later returned. You must also maintain a register of temporary movements of goods, as described in paragraph 16.8.

10.8 Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Goods sent from Northern Ireland used in making a supply of services in an EU member state that remain outside of Northern Ireland for less than 2 years	No	No	No	Requirement to keep a register of goods moved temporarily (see paragraph 16.8)
Goods sent from Northern Ireland used in making a supply of services in an EU member state that remain outside of Northern Ireland for more than 2 years	No	No	Yes – as a dispatch (value based on cost of goods)	Requirement to keep a register of goods moved temporarily (see paragraph 16.8)
Temporary transfer of goods from Northern Ireland which would be eligible for temporary importation relief if sent from outside EU that remain outside of Northern Ireland for less than 2 years	No	No	No	Requirement to keep a register of goods moved temporarily (see paragraph 16.8)

11. Installed or assembled goods

11.1 The meaning of ‘installed or assembled goods’

A supply of installed or assembled goods occurs when you supply goods and there’s a contractual obligation for you to install or assemble the goods for your customer. For example, a supplier of studio recording equipment where the supply involves installation at the customer’s studio.

11.2 Place of supply of installed or assembled goods

The supply takes place where the installation or assembly of the goods is carried out.

11.3 Register for VAT for supplies of installed or assembled goods

You’re liable to register for VAT in the UK or any EU member state in which you’re supplying installed or assembled goods. But some EU member states operate a simplified procedure which permits the VAT-registered customer to account for the VAT due. You’re not required to register in an EU member state which has this facility.

11.4 EU member states that operate the simplified procedure

Adoption of the simplified procedure is optional. To find out if it’s available in a particular EU member state you should contact the VAT authority there (see paragraph 2.8).

11.5 Liability to acquisition tax

The movement of the goods (for example, the component parts) between Northern Ireland and EU member states as part of a supply of installed or assembled goods is not treated as a supply of own goods. Consequently, there is no acquisition into Northern Ireland or the EU member state of installation or assembly.

11.6 Accounting for VAT on goods installed or assembled in Northern Ireland

If you supply goods from outside the UK to be installed or assembled in Northern Ireland (your supply is liable to VAT in the UK and you may be required to register here. But the simplified procedure mentioned in paragraph 11.3 is available in Northern Ireland. You may use that simplified procedure provided:

• your customer is registered for VAT in the UK and is identified as trading/operating under the Protocol

• you’re registered for VAT in an EU member state
• you’re not required to be registered in the UK for any other reason

11.7 The simplified procedure

Under the simplified procedure your customer is treated as acquiring the goods into Northern Ireland and must account for acquisition VAT on the full value of your supply. As a result you’re no longer liable to account for VAT.

11.8 Using the simplified procedure

If you’re a supplier in an EU member state and you wish to use these simplified arrangements you must do all of the following:

Step 1

Issue your customer with a VAT invoice.

Step 2

Issue that invoice within 15 days of the date on which your supply would otherwise have taken place under normal UK time of supply rules for goods. (For further information about this, see the sections dealing with time of supply in the VAT guide (Notice 700)). These include receipt of a payment, or completion of the installation or assembly.

Step 3

Tell us you intend to use this arrangement by writing to:

HM Revenue and Customs – VAT Written Enquiries
123 St Vincent Street
Glasgow City
Glasgow
G2 5EA
United Kingdom

Include the following information:

• your name, address and EU VAT registration number
• the name, address and VAT registration number of your customer (you must make a separate notification for each customer no later than the date of issue of the first invoice to the customer concerned)
• the date on which you began, or will begin, the installation or assembly of the goods

Step 4

Send a copy of the notification to your customer to advise them that you’re using the simplified arrangements and so they’re required to account for the VAT. You must send this no later than the date you issue the first invoice to your customer.

11.9 Notification for further supplies to the same customer

You only have to make one notification for each customer, the notification will cover all future supplies to them. You will only have to make further notifications for new customers.

11.10 Receive installed or assembled goods from a supplier using the simplified procedure

As the customer receiving the supply in Northern Ireland you should account for VAT on the supply to you as an acquisition by including the tax in box 2 of your VAT Return. You may also include this as input tax on the same VAT Return subject to the normal input tax deduction rules (see paragraph 2.13).

11.11 Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)
Goods sent from Northern Ireland for installation or assembly in an EU member state	Box 6 – value of supply Box 8 – value based on cost of goods at time of dispatch	No	Yes – as a dispatch (value based on cost of goods if known, otherwise open market value)
Goods sent from an EU member state for installation or assembly in Northern Ireland where supplier registers for VAT in UK and is identified as trading/operating under the Protocol	Box 1 – output tax Box 6 – value of supply	No	Yes – as an arrival (value based on cost of goods if known, otherwise open market value)
Goods installed or assembled in Northern Ireland where supplier elects to use simplification procedure. (Customer is responsible for reporting requirements)	Box 2 – acquisition VAT Box 4 – input tax (subject to normal rules see paragraph 2.13) Boxes 7 and 9 – value of acquisition	No	Yes – as an arrival (value based on cost of goods if known, otherwise open market value)

12. Movements of goods for process, repair, and so on

12.1 This section

This section outlines the VAT treatment of goods that are moved between Northern Ireland and EU member states in circumstances where some form of service is to be applied to those goods. The services can include things like processing, repair and valuation.

12.2 Goods sent from Northern Ireland for work to be carried out elsewhere in the EU

This can include goods sent to more than one service provider in the EU member state or in different EU member states provided, in all cases, the goods are returned to Northern Ireland after the services have been completed. Where it applies there is no deemed supply of own goods as described in section 9.

You must:

Step 1

Record the movement of the goods in your temporary movements register (see paragraph 16.8).

Step 2

Hold commercial documentary evidence that the goods have been removed from Northern Ireland.

Step 3

Account for VAT on each of the supplies of services you have received as a reverse charge. (For further information about the reverse charge, as it applies to work carried out on goods, see VAT Notice 741A: place of supply of services.)

Step 4

Where applicable complete an Intrastat Supplementary Declaration (see paragraph 12.7). For more information about Intrastat, see Notice 60: Intrastat general guide.

12.3 Goods sent to Northern Ireland for work to be carried out

As the supplier of the service there is no requirement for you to account for VAT on the movement of the goods provided you return them to your customer when the work has been completed. VAT Notice 741A: place of supply of services. Tells you about the treatment of your supply of work on the goods.

You must:

Step 1

Record the arrival and return of the goods in your temporary movements register (see paragraph 16.8).

Step 2

Hold commercial documentary evidence that the goods have been removed from Northern Ireland.

Step 3

Where applicable complete an Intrastat Supplementary Declaration (see paragraph 12.7). For more information about Intrastat, see Notice 60: Intrastat general guide.

12.4 Goods not returned to the EU member state of departure

These arrangements do not apply if, for any reason, the goods are not eventually returned to the EU member state from which they were originally sent. In that event they become subject to the normal EU supply and acquisition rules and the owner of the goods may be liable to register for VAT in the EU member state concerned.

12.5 Work performed on goods in an EU member state before removal to Northern Ireland

This can occur where you buy goods from an EU member state and have work performed on them before they’re removed to Northern Ireland. The work may be performed by more than one supplier and they may be located in different EU member states. Whatever the position you’re required to:

Step 1

Account for acquisition VAT on the supply of the goods in the normal way.

Step 2

VAT Notice 741A: place of supply of services tells you about the treatment of the supply to you of work on the goods.

Step 3

Where applicable complete an Intrastat Supplementary Declaration (see paragraph 12.7). For more information about Intrastat, see Notice 60: Intrastat general guide.

12.6 Work performed on goods before removal from Northern Ireland

This can occur if you make an EU supply of goods and your customer has work performed on them before they leave Northern Ireland. In this situation you can continue to treat the supply under the normal rules described in section 3 provided you meet all the relevant conditions. You will therefore need to make sure that your customer provides you with evidence of removal of the goods from Northern Ireland once the work has been completed (see paragraph 4.5).

12.7 Reporting requirements

Repaired goods

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Goods sent to an EU member states for repair – owner’s reporting requirements	No	No	No
Goods received back in Northern Ireland by owner after repair in an EU member state - UK owner’s reporting requirements	Box 1 – output tax* Box 4 – input tax, subject to normal rules (see paragraph 2.13) Box 6 – value of repair services	No	No	*Output tax accounted for on repair services as a reverse charge (see paragraph 12.2)
Goods for repair received in Northern Ireland from EU member states – UK repairer’s reporting requirements	No	No	No
Repaired goods returned to customer in an EU member state – UK repairer’s reporting requirements	Boxes 6 – value of repair service	No	No	VAT on repair services accounted for by EU customer as a reverse charge (see paragraph 12.3)

Processed goods

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)
Goods sent from Northern Ireland for process in an EU member state – UK owner’s reporting requirements	No	No	Yes – as a dispatch (value based on cost of goods)
Goods returned to Northern Ireland from EU processor – UK owner’s reporting requirements. (Output tax accounted for on processor’s services as a reverse charge (see paragraph 12.2)	Box 1 – output tax* Box 4 – input tax subject to normal rules (see paragraph 2.13) Box 6 - value of the processing services	No	Yes – as an arrival (value based on cost of goods and cost of process)
Goods received for process in Northern Ireland from EU customer – UK processor’s reporting requirements	No	No	Yes – as an arrival (value based on cost of goods if known, otherwise open market value)
Goods returned after process in Northern Ireland to EU customer – UK processor’s reporting requirements. (VAT on processing services accounted for by EU customer as a reverse charge (see paragraph 12.3)	Box 6 – value of process	No	Yes – as a dispatch (value based on cost of goods, if known, otherwise, open market value and cost of process)

13. Triangulation

13.1 The meaning of ‘triangulation’

Triangulation is the term used to describe a chain of EU supplies of goods involving 3 parties. But, instead of the goods physically passing from one to the other, they’re delivered directly from the first to the last party in the chain. For clarity references in this section to UK company means a UK VAT registered business identified as trading/operating under the Protocol.

For example:

Image showing an example of triangulation

The image shows a business in France invoice a UK based business identified as trading under the Northern Ireland Protocol, whilst at the same time sending goods to Germany. The UK business then invoices the business in Germany.

Here a UK company receives an order from a customer in Germany. To fulfil the order the UK supplier in turn orders goods from their own supplier in France. The goods are delivered from France to Germany.

13.2 The supply position

There’s a supply of goods by the	and this means that
French company to the UK company	the French company can zero rate the supply subject to the conditions described in paragraph 4.3
UK company to the German company	the UK company is acquiring and supplying those goods in Germany and is liable to register for VAT there unless the simplified procedure described at paragraph 13.5 is used

13.3 Involved in triangulation

You might be involved in triangulation as either the:

• first supplier of the goods (the French company in the example)
• intermediate supplier (the UK company in the example)
• final customer (the German company in the example)

13.4 Treatment of supplies for VAT purposes

The VAT treatment without triangulation simplification would normally be, if you’re the:

• first supplier, you may zero rate your supply of the goods subject to the conditions in paragraph 4.3
• intermediate supplier, you may be liable to register for VAT where the goods are delivered and account for VAT on the acquisition and on your supply
• final customer, you may not need to do anything as you’re receiving a domestic supply (but see the simplified procedure described in paragraph 13.5)

13.5 Registration of the intermediate supplier

An intermediate supplier is not necessarily required to register where the goods are delivered (see paragraph 13.2) as there’s a simplified procedure which can be used in these circumstances.

13.6 When to use the simplified procedure

As the intermediate supplier you can use the simplified procedure if you:

• are already registered for VAT within the EU or are VAT registered in the UK and identified as trading/operating under the Protocol.
• are not registered, or otherwise required to be registered, in the EU member state (or identified as trading/operating under the Protocol) where the goods are physically delivered
• your customer is registered for VAT in the EU member state (or identified as trading/operating under the Protocol) where the goods are physically delivered.

13.7 Use of the simplified procedure as a UK intermediate supplier

To use the simplified procedure if you’re a UK intermediate supplier making supplies of goods to a customer in an EU member state, you must do all of the following:

Step 1

Use your UK VAT registration number together with the identifier that you are trading/operating under the Protocol to allow your EU supplier to zero rate the supply of goods in the EU member state from which the goods were dispatched.

Step 2

Issue a VAT invoice to your customer containing all the details normally required for EU supplies.

Step 3

Include the supply on your EC Sales List (see section 17), quoting the VAT number of your customer in the EU member state of destination of the goods.

Step 4

On your EC Sales List enter the total value of triangulated supplies to a customer separately from any other EU supplies to that same customer.

Step 5

Identify your triangular transactions by inserting the figure 2 in the indicator box (the notes on the reverse of the EC Sales List give further details).

Step 6

Omit details of triangular transactions on your UK VAT Return and Intrastat Supplementary Declaration (see section 18).

13.8 Submitting a UK EC Sales List if your EU supplies only involve triangular contracts

EC Sales Lists (forms VAT101 and 101A) can be submitted:

• using the EC Sales List Online Service (see paragraph 17.4)
• by downloading the forms
• by contacting the VAT helpline who will arrange for EC Sales Lists to be sent to you automatically

13.9 Use of the simplified procedure as an intermediate supplier in an EU member state

If you’re an intermediate supplier in an EU member state making supplies into Northern Ireland to a customer in the UK you can avoid having to register for VAT in the UK by using the simplified procedure. To do so you must do all of the following:

Step 1

Issue a VAT invoice to your customer containing all the details required by the EU member state in which you’re VAT-registered. You will need to ensure the customer is identified as trading/operating under the Protocol and include that identifier on you sales invoice in lieu of the country code.

Step 2

Issue that invoice within 15 days of the date on which your supply would otherwise have taken place under normal UK tax point rules for supplies of goods (for further information about tax points, see the sections sealing with time of supply in the VAT guide (Notice 700)).

Step 3

Tell us you intend to use this arrangement. You should write to:

The Non Established Taxable Persons Unit (NETPU)
HMRC
Ruby House
8 Ruby Place
Aberdeen
AB10 1ZP

Include the following information:

• your name, address and EU VAT registration number you used, or will use, to get zero rating of the initial supply of the goods
• the name, address and VAT registration number of your UK customer (you must make a separate notification for each customer no later than the date of issue of the first invoice to the customer concerned)
• the date the goods were first delivered, or are intended to be delivered, to your customer under these arrangements

Step 4

Send a copy of the notification to your customer to advise them that you’re using the simplified arrangements and so they are required to account for the VAT. You must send this no later than the date you issue the first invoice to your customer.

13.10 Make further notifications for the same customer

You will not have to make further notifications for the same customer, but you will have to make further notifications for any new customers.

13.11 Goods received from a supplier using the simplified procedure

As a UK customer whose supplier is using the simplified procedure you should do the following:

Step 1

On receipt of your copy of your supplier’s notification to HMRC (see paragraph 13.9 – step 4), account for VAT on the goods supplied to you under the simplified procedure as an acquisition (see section 7).

Step 2

Submit supplementary declarations for goods supplied to you under these simplified arrangements (see section 18).

13.12 Triangulation involving a non-EU intermediate supplier

A non-EU intermediate supplier includes UK businesses that are not identified as trading/operating under the Protocol. The VAT treatment will depend on the VAT-registered status of the intermediate supplier. If the intermediate supplier is:

• already registered for VAT within the EU, then the procedures described earlier in this section will apply
• not registered for VAT within the EU, then the first supplier will be making a domestic supply (see section 6), but in acquiring or supplying the goods involved, the intermediate supplier may be required to register in either the EU member state of dispatch or arrival

13.13 Triangulation where the movement of the goods is to a place outside the EU

Triangulation in these circumstances is not an issue. The supplier may, regardless of the location of the other parties, treat the supply as an export (see VAT Notice 703: exports of goods from the UK).

13.14 Triangulation where the movement of goods is from a place outside the EU

The triangulation simplification arrangements do not apply in these circumstances and it may be necessary for the first supplier or the intermediary supplier to register for VAT in the EU member state where the supply takes place, depending on who imports the goods.

14. Supplies to privileged persons

These supplies will be treated as non-EU movements and you will need to follow guidance for exporting from the UK.

15. Other EU movements of goods

15.1 This section

This section gives information about:

Subject	Location
Call-off stocks	paragraph 15.2
Consignment stocks	paragraph 15.3
Excise goods	paragraph 15.4
VAT treatment of goods removed from a warehouse to a place outside Northern Ireland	paragraph 15.5
Goods supplied on sale or return, or similar terms	paragraph 15.6
Samples	paragraph 15.7
Goods sent for testing	paragraph 15.8
Chain transactions	paragraph 15.9

15.2 Call-off stocks

15.2.1 Call-off stock

Call-off stock refers to goods transported by a supplier from a state of origin to a state of destination. These goods will be supplied (called-off) at a later date and after they have arrived in the state of destination.

For the purposes of paragraph 15.2 references to state of origin and state of destination are references to an EU member state and the territory of Northern Ireland within the UK.

This only applies in cases where the goods, at the time of shipping, are destined for a identified customers either:

• for consumption within their business (for example, as part of a manufacturing process)
• to make onward supplies to their own customers

Movements of goods to maintain the supplier’s own stocks in an EU member state, or where they are available for call-off by more than one customer, are to be dealt with as consignment stocks (see paragraph 15.3).

15.2.2 Normal VAT treatment of call-off stocks

If you:

• send goods from Northern Ireland to be held as call-off stock in an EU member state, then the normal EU rules apply so that your supply is treated as taking place in Northern Ireland and may be zero-rated subject to the conditions described in paragraph 4.3.
• send goods to Northern Ireland as call-off stock, then that is a transfer of own goods [section 9] followed by a supply in Northern Ireland when the goods are called-off. The supplier will be required to register for VAT in the UK.

15.2.3 Call-off stock simplification

The simplification is provided for in Article 17a of Directive 2006/112/EC The simplification avoids the supplier having to VAT register in the place where the goods are to be called off by allowing the supply of the goods to be treated as occurring when the goods are supplied to the customer. This is subject to certain conditions.

There is no obligation on a business to structure transactions so as to meet the conditions and fall within the simplification rules. Businesses who do not meet the conditions and so do not fall within the new rules should follow the guidance at 15.2.2.

15.2.4 simplification principles

The physical movement of the goods from the state of origin to the destination does not give rise to an community supply at that time. The goods that are held as call-off stock in the destination are considered, for VAT purposes, to still be within the scope of VAT in the state of origin. The supply is when the goods are called off by the customer. At that point, the normal VAT accounting rules for a cross border sale of goods apply, that is the customer accounts for acquisition tax.

Businesses must comply with a number of conditions if they want to take advantage of this simplification. These are set out in 15.2.5.

The rules include situations when call-off stock treatment is deemed to be terminated. Termination of treatment prior to the goods being called off may give rise to a requirement for the supplier to register for VAT in the state of destination and to bring the goods to account as an acquisition of own goods.

15.2.5 Call-off stock simplification conditions

In order for the simplification to apply, certain conditions must be met. The key conditions are that at the time of removal of the goods from the state of origin to the state of destination by or under the directions of the supplier:

• a call-off stock agreement is in place with the customer
• the supplier is removing the goods to the state of destination with the intention of supplying those goods to the customer there after their arrival in the state of destination
• the supplier does not have a business establishment or other fixed establishment in the destination state
• the customer is VAT registered in the state of destination and the supplier knows the customer’s identity and VAT registration number
• the supplier records the removal of the goods in the register referred to in sub-paragraph 15.2.8
• the customer’s VAT registration number in the state of destination is reported on the supplier’s EC sales list

15.2.6 Call-off stock simplification agreements

A call-off stock agreement is a contract between a supplier and its customer, which entitles the customer to call the stock off – that is, to take ownership of the goods.

For the purposes of applying the simplification, it is recommended that the contract also provides that:

• the supplier will remove the goods from the state of origin to the state of destination
• the goods are to be located in the state of destination when they are to be called-off

A contract that simply provides for the goods to be made available on the demand of the customer but does not set out how that is to be achieved or where the goods are to be stored before they are made available does not provide evidence that the conditions for the new simplified rules are met.

Contracting parties are recommended to have an express provision in the contract to state whether or not it is a contract to which the parties wish Article 17a of Directive 2006/112/EC to apply.

15.2.7 Call-off stock simplification meaning of established and business establishment

For the purposes of these rules a business is said to be established if:

• the business is registered in a member state under similar arrangements to registering at Companies House in the UK
• in the UK the business is established in Northern Ireland if that is where it’s registered address is at Companies House.
• the business (whether or not related to the call-off stock arrangements) is conducted from premises through the presence of the means to conduct that business
• the warehouse where the call-off stock is to be located is owned (or rented) and directly run by the supplier with their own employees

A VAT registration does not of itself constitute being established or having a fixed establishment. Ownership of the warehouse which is operated by an independent third party does not of itself constitute being established or having a fixed establishment.

15.2.8 Call-off stock simplification Prescribed records

As a condition of the application of the simplification, the supplier must record in a register (the Call-off Stock Register) the transfer of stock to the state of destination under the call-off stock arrangements.

When the goods are physically removed to the state of destination, a record must be made of the transfer of the goods. The Call-off Stock Register must also be kept up to date, and it must record when goods are called off.

The information that must be contained in the Call-off Stock Register is set out in Article 54a of Council Implementing Regulation 282/2011 (the “Implementing Regulation”). The Implementing Regulation is directly applicable, so no further legislation is required to implement it into UK law.

The Implementing Regulation requires the supplier’s Call-off Stock Register to record:

a. the state of origin and the date of dispatch or transport of the goods.
b. the VAT registration number of the customer in the state of destination.
c. the state of destination, the VAT registration number of the warehouse keeper, the address of the warehouse at which the goods are stored upon arrival and the date of arrival of the goods in the warehouse.
d. the value, description and quantity of the goods that arrived in the warehouse.
e. the VAT identification number of the taxable person substituting for the customer, where the substitution rule conditions are satisfied.
f. the date on which the goods are called-off by the customer in accordance with the conditions for the simplified treatment the taxable amount, description and quantity of the goods so called-off by the customer and the customer’s VAT registration number in the state of destination.
g. the taxable amount, description and quantity of the goods affected by a relevant event and the date of the relevant event.
h. the value, description and quantity of the returned goods and the date of the return of the goods as referred to as Returned Goods.

The Implementing Regulation requires the customer’s Call-off Stock Register to record:

a. the VAT registration number of the supplier of the goods subject to the call-off stock arrangements.
b. the description and quantity of the goods intended for him.
c. the date on which the goods intended for him arrive in the warehouse.
d. the taxable amount, description and quantity of the goods supplied to him and the date on which the customer’s acquisition of the goods is made.
e. the description and quantity of the goods, and the date on which the goods are removed from the warehouse by order of the supplier.
f. the description and quantity of the goods destroyed or missing and the date of destruction, loss or theft of the goods or the date on which the goods were found to be destroyed or missing.

Where the customer is not the warehouse keeper, so will not necessarily have access to all the information, their Call-off Stock Register does not need to contain the information referred to in points (c), (e) and (f).

Contracting parties are recommended to set out in the contract(s) how they intend to fulfil the record keeping requirements, including how the necessary information is to be communicated between the parties.

If you fail to make or retain the required records, you may be liable to a penalty.

The following sentences have the force of law.

A supplier which dispatches goods from Northern Ireland must preserve the records it keeps in the Call-off Stock Register for 6 years.

A customer which calls-off goods in Northern Ireland must preserve the records it keeps in the Call-off Stock Register for 6 years.

15.2.9 Call-off stock simplification EC Sales List

When call-off stocks are sent from a state of origin to a warehouse or a customer’s storage facility in a state of destination, this must be recorded in the supplier’s EC Sales List.

The information that must be supplied on the EC Sales List is:

• the customer’s country code
• the customer VAT Registration Number
• the call-off stock indicator

If there has been a change in the intended customer during a period under the substitution rule. The supplier must record the following information on its EC Sales List for that period:

• the original customer’s country code
• the original customer’s VAT registration number
• the new customer’s country code
• the new customer’s VAT registration number
• the call-off stock indicator for a change in intended customer

If call-off stocks are returned to the state of origin without being called-off under the rules for returned goods, the following information must be recorded in the supplier’s EC Sales List for the period in which the goods were returned:

• the customer’s country code
• the customer VAT registration number
• the call-off stock indicator for returned goods

No values should be entered on an EC Sales list where the entry relates to call-off stocks.

15.2.10 Call-off stock simplification Calling-off

The following treatment applies subject to meeting conditions that:

• the supply is made within 12 months of the arrival of the goods in the state of destination
• there has not been a prior relevant event

When the goods are called-off by the customer the supplier makes the supply of the goods to the customer for VAT purposes. This supply should be treated as giving rise to the transaction at that time. This means that the supplier makes a supply of the goods in the state of origin and the customer acquires the goods for VAT purposes in the state of destination.

The normal time of supply and VAT accounting rules as set out in paragraph 4.4 will apply. This includes the requirement to make the normal EC Sales List declaration for such a supply. In addition, the Call-off Stock Register should be updated to record the call-off of the goods by the customer.

15.2.11 Call-off stock simplification events which trigger an ‘acquisition of own goods’

12 month rule

Stock is permitted to be held in the state of destination pending call-off for up to 12 months from arrival into the state of destination. For all practical purposes, the date of arrival into the warehouse can be used as that date. Where stock, for example commodities, is handled on a last-in first-out basis then this can be treated as though first-in, first-out were in operation and the Call-off Stock Register can be maintained on that basis.

If 12 months pass from the date of arrival of the goods in the state of destination without the goods being called off by the customer there is deemed to be:

• a supply by the supplier of the goods in the state of origin
• an acquisition by the supplier of the goods in the state of destination (an acquisition of own goods)

Any subsequent supply of the goods by the supplier will be in the state of destination (businesses should confirm the treatment with the relevant authorities in the state in question).

The deemed supply and deemed acquisition occurs on the day after the 12 month period ends. The normal time of supply and VAT accounting rules as set out in paragraph 4.4 will apply.

This includes the requirement to make the normal EC Sales List declaration for such a deemed supply.

A relevant event

A relevant event is:

a. the supplier no longer intends to supply the goods to the original customer.
b. the supplier intends to supply the goods to the customer in a place other than the state of destination.
c. the supplier establishes a business establishment or other fixed establishment in the destination state.
d. the customer ceases to be VAT registered in the state of destination.
e. the supplier removes the goods from the state of destination other than to return them to the state of origin.
f. the goods are destroyed, lost or stolen (HMRC does not consider that the goods are destroyed, lost or stolen where it is a small loss - see Small losses of call-off stock held in Northern Ireland).

Where a relevant event occurs, there is deemed to be:

• a supply by the supplier of the goods in the state of origin
• an acquisition by the supplier of the goods in the state of destination (an acquisition of own goods)

Any subsequent supply of the goods by the supplier will be in the state of destination (businesses should confirm the treatment with the relevant authorities in the state in question).

The normal time of supply and VAT accounting rules as set out in paragraph 4.4 will apply.

This includes the requirement to make the normal EC Sales List declaration for such a deemed supply and acquisition.

Substitution rule

The substitution rule permits the supplier to decide not to supply the call-off stock to the original customer but, instead, to supply it to a different customer (‘the substitute customer’) without triggering an acquisition of own goods by the supplier under the rules for relevant events.

Certain conditions apply:

• the supplier must decide not to supply the goods to the original customer and at the same time decide to supply them to the substitute customer
• the substitute customer must at that time be registered for VAT in the state of destination
• the supplier must include the substitute customer’s VAT registration number in its EC Sales List
• the supplier must record the intention to supply goods to the substitute customer in the Call-off Stock Register

The introduction of a substitute customer does not change the application of the 12-month rule which applies to the goods and not to the customer.

The substitution can be in respect of the whole amount of the goods held, or in respect of part of the goods.

Example

A customer’s business is taken over by another taxable person. That person may become the substitute customer where the conditions are met.

There are several call-off customers for the same type of goods and the stock when initially sent is allocated appropriately to each customer in the Call-off Stock Register.

However, one customer requests call-off for an amount greater than that recorded in the Call-off Stock Register. The substitute customer rules will, where the conditions are met, apply to any additional stock that is called off by a substitute customer in these circumstances.

Returned goods

Call-off stock may be returned to the state of origin by the supplier without giving rise to an acquisition of own goods by the supplier under the 12-month rule or the relevant events rule.

This is conditional on:

• the goods being returned to the state of origin by or under the direction of the supplier during the 12-month period beginning with their arrival in the state of destination
• the Call-off Stock Register being updated accordingly

It is not necessary for the goods to be returned to the premises of the supplier as the goods may have been sold to another person in the state of origin.

Where this is the UK, as the goods are still considered to be within the scope of UK VAT, any supply to another UK business that involves the goods being transferred back to the UK will simply be a UK domestic supply.

In addition, the return of the goods must be reported on an EC sales list by the supplier.

Small losses of call-off stock held in Northern Ireland

A “small loss” of goods destroyed, lost or stolen may be disregarded for deemed acquisition purposes.

A small loss is where 5% or less of the quantity of relevant goods delivered into the UK warehouse in any (rolling) 12-month period are destroyed, lost or stolen within that same 12 months. 

The supplier must identify the “relevant goods” and quantity by reference to the descriptions entered into the call-off stock register. That is the quantum of the goods lost should be measured against the delivered quantities of the same goods (less any returns). 

Only the goods destroyed, lost or stolen in excess of the 5% measure need to be accounted for as a deemed acquisition into the UK. 

Example for small loses of call off stock

In the first month of operating the call-off regime 1,000 units are delivered and 900 have been called off. An audit shows that of the remaining 100, 10 are missing. As the 10 missing represent 1% of the 1,000 delivered it is a small loss.

At the end of 9 months a further 8000 units are delivered making a total of 9,000. A stock check shows that a further 400 were missing. The total loss is now 410 out of 9,000 delivered (4% rounded down) so still a small loss.

At the end of 11 months a total of 11,000 have been delivered but a further 1000 are destroyed in an accident.

Total loss is now 1410 out of 11,000 delivered (12% rounded down). This is no longer a small loss.

You should therefore account for the loss of 770 units calculated as follows:

• 12% loss less 5% (small loss that does not need to be accounted for) leaves 7%
• delivered quantity 11,000 of which 7% is an accountable loss, or 770 units
• on the day the loss occurs (or is identified) you should account for 770 units as having been acquired

At the end of month 13 the 1,000 units and the 10 lost in month 1 will drop out of the calculation.

15.2.13 Reporting requirements

Guidance on reporting under the 2020 rules can be found at How to report your EU sales for VAT.

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Goods sent as call-off stocks from Northern Ireland to an EU member state	Boxes 6 and 8 – value based on cost of goods	Yes – value based on cost of goods	Yes – as a dispatch, (value based on cost of goods)	The supply may be zero-rated
Goods received into Northern Ireland as call-off stocks	Box 2 – acquisition VAT for positive-rated goods in Northern Ireland Box 4 – input tax subject to normal rules Boxes 7 and 9 – value based on cost of goods	No	Yes – as an arrival (value based on cost of goods)	There is an acquisition into Northern Ireland

15.3 Consignment stocks

Consignment stocks are goods you transfer between Northern Ireland and EU member states to meet future supplies to be made by you, or on your behalf, in the EU member state of arrival. The important feature is that the movement of the goods occurs before a customer has been found for them. This can include goods not meeting the conditions necessary for treatment as call-off stocks (see paragraph 15.2).

Consignment stocks are treated as a transfer of own goods for VAT accounting and reporting purposes (see section 9).

15.4 Movements of excise goods between Northern Ireland and EU member states

All excisable goods must travel with an electronic Administrative Document (eAD).

Examples of the circumstances in which they are used are as follows.

If the movement of goods is between warehouses and	then
they’re moving under authorised duty suspension arrangements (for example an excise warehouse)	the consignor must complete an eAD – there must also be a financial guarantee to cover all excise duty liabilities during the movement – the consignee must complete a certificate of receipt for the goods on the reverse of copy 3 of the eAD and return it to the consignor
UK excise duty has already been paid	the goods should travel with eAD – the customer must also provide evidence that the excise duty has been paid in the EU member state of destination or secured to the satisfaction of the VAT authorities there, before the supplier dispatches the goods

For further information on the use of eADs, see Excise Notice 197: receipt into and removal from an excise warehouse of excise goods.

(a) Supply of excise goods to persons not registered for VAT

You can zero rate an EU supply of excise goods to persons not registered for VAT in an EU member state, provided all the following 3 conditions are met:

1. The goods are not for private use.
2. They’re removed or dispatched from Northern Ireland to a destination in an EU member state by or on behalf of the customer.
3. You receive a validated eAD in accordance with the procedures explained in Notice 197.

(b) Payment of excise duty and VAT in the EU member state of arrival

If the conditions in sub-paragraph (a) are not met, the customer is liable for the excise duty and VAT. If duty suspended goods go missing in transit then the person who supplied the movement guarantee will be liable for the duty, along with any person who may be jointly and severally liable.

(c) VAT treatment for excise goods supplied to a VAT-registered customer

Excise goods sold to somebody who’s registered for VAT in an EU member state are treated in the same way as any other type of goods.

(d) Excise goods supplied for private purposes

Excise goods supplied for private purposes where you arrange delivery to a customer in an EU member state are covered by the special VAT arrangements for distance selling (see paragraph 6.4). Also the vendor must pay the duty in the EU member state of destination at the time the goods are delivered.

As such a vendor, you:

• are responsible for ensuring that the UK excise duty is paid before you send goods to a customer in Northern Ireland
• must appoint a tax representative in the UK to account for the duty on your behalf

See paragraphs 11.3 and 11.4 of Excise Notice 204b for more information on where excise goods are sold to a customer in an EU member state.

15.5 VAT treatment of goods removed from a warehouse to a place outside Northern Ireland

If goods are removed from a tax warehouse in Northern Ireland to a destination outside the UK, you will not have to pay the VAT normally due on removal to home use. In such circumstances, either the person making the final supply in warehouse or the person removing the goods can zero rate that transaction provided certain conditions are met. Liability to meet the zero-rating conditions must be clearly established before the goods are delivered to avoid any doubt as to where responsibility lies.

The following table provides an overview of the VAT implications when goods are removed from Northern Ireland to a place outside the UK:

Where goods are removed from warehouse to	The VAT treatment
Great Britain or a country outside the EU	Any VAT which would be due on removal to UK home use is not payable – supplies of goods removed from Northern Ireland may be zero-rated as exports subject to meeting the conditions in VAT Notice 703: export of goods from the UK. an EC Sales List is not required
a VAT-registered customer in an EU member state	You may zero rate a supply of goods to a customer who’s VAT-registered in another EU country where the goods are moving outside the warehousing system an EC Sales List and an entry in box 8 of the VAT Return is required
a tax warehouse in an EU member state	You may disregard, for UK VAT purposes, any supply of the goods provided you’re removing them directly to a registered tax warehouse in another EU country an EC Sales List and an entry in box 8 of the VAT Return is required

15.6 Goods sent on sale or return, approval or similar terms

These are goods which are not supplied until they’re adopted by the customer. Adoption occurs when the customer indicates that they’re going to keep the goods. Until then the customer has an unqualified right to return them at any time, unless there’s an agreed time limit after which the goods are to be automatically treated as accepted.

(a) Accounting for VAT

If you send goods:

• from Northern Ireland on sale or return, approval or similar terms to somebody in an EU member state, then you should treat this as a transfer of own goods (see section 9), this means that:
• you’ll be making an acquisition of the goods in the EU member state to which the goods are sent
• you’ll be making a supply of those goods in that EU member state if, and when, the goods are eventually adopted by your customer
• you may need to register there to account for any VAT due on the acquisition and supply of the goods
• to Northern Ireland from an EU member state on sale or return, approval or similar terms, then you should treat this as a transfer of own goods (see section 9), this means that:
• you’ll be making an acquisition of the goods into Northern Ireland
• a supply of those goods within Northern Ireland if, and when, the goods are eventually adopted by your customer
• you’ll also be liable to register for VAT in the UK, to account for any VAT due on the acquisition and supply of the goods

(b) Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)
Goods sent from Northern Ireland to an EU member state	Boxes 6 and 8 – value based on cost of goods	Yes – value based on cost of goods	Yes – as a dispatch (value based on cost of goods)	See section 9 (transfers of own goods) – this assumes sender of goods is registered for VAT in the EU member state of arrival
Goods sent to Northern Ireland from an EU member state	Box 2 – acquisition VAT for positive-rated goods in UK Box 4 – input tax subject to normal rules Boxes 7 and 9 – value based on cost of goods	No	Yes as an arrival (value based on cost of goods)	There’s an acquisition into Northern Ireland by the owner of the goods

15.7 Samples

Movements of goods that qualify as samples are disregarded for EU supply and acquisition purposes. Details of the conditions that must be met to treat something as a sample can be found in the VAT guide (Notice 700).

Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)
Samples sent to, or received from, an EU member state	No	No	No (when the goods are supplied free of charge)

15.8 Goods sent for testing

Goods sent to, or received from, an EU member state for testing are disregarded provided that:

• ownership remains unchanged
• the goods are either returned to the EU member state of departure or are destroyed

Reporting requirements

Type of movement	VAT Return	EC Sales List (see section 17)	Supplementary Declaration (see section 18)	Notes
Goods sent to, or received from, an EU member states for testing	No	No	No (unless it is known at time of dispatch that they will be tested to destruction – if so value based on cost of goods)

15.9 Chain transactions

A chain transaction occurs where there are a number of businesses successively buying and selling the same goods but the goods themselves are transported directly from the original supplier and delivered to the final purchaser.

The rules simply determine which transaction in a chain is to be treated as the cross-border EU supply. These rules do not affect chain transactions that do not involve a cross-border movement of the goods.

All supplies leading up to and including the EU supply are to be treated as taking place where the goods started the movement, and all subsequent supplies are to be treated as being made where the goods are destined.

The default position is that the EU supply is the supply to the person (intermediary operator) in the chain who arranges for the goods to be moved across the border.

The intermediary operator who arranges for another party to physically transport the goods remains the intermediary operator.

If that intermediary operator is VAT registered in the same country as the supplier, then, provided that the intermediary operator supplies its VAT number to its supplier, the onward supply by the intermediary operator can then be treated as the EU supply.

If the intermediary operator does not disclose the existence of the chain to the supplier then normal supply, dispatch and liability rules will apply.

16. Accounting and record keeping

16.1 Completion of other returns in addition to your VAT Return

In addition to the VAT Return you may have to complete the following:

• an EC Sales List – listing goods that you have sent to VAT-registered businesses in EU member states are subject to the reverse charge procedure in your customer’s EU member state
• an Intrastat Supplementary Declaration, which is completed for supplies of goods by larger businesses

For further information see section 17 and 18.

16.2 Completion of VAT Returns, EC Sales Lists and Supplementary Declaration

The reporting requirements for the various types of EU transaction covered by this notice are described in each section.

16.3 Boxes to complete on your VAT Return to account for supplies and acquisitions of goods

On the VAT Return (form VAT100) there are a number of boxes to gather information on the value of goods sold to, or bought from, EU member states and 2 boxes for VAT due on acquisitions. These are:

Box number	Description
2	Total VAT due on acquisitions into Northern Ireland in the period
4	Amount of VAT deductible on any business purchase including acquisitions of goods into Northern Ireland and related costs from EU member states (subject to the normal input tax rules)
6	Total value of all your business sales including supplies to EU member states
7	Total value of purchases including acquisitions into Northern Ireland from VAT-registered suppliers in EU member states
8	Total value of supplies of goods and directly related costs (such as freight and insurance charges) to EU member states in the period (excluding VAT). The value you enter in box 8, should be the total of all EU supplies of goods made in that reporting period (excluding VAT) and not just the value of payments received. (Figures entered in this box must also be included in the box 6 total.)
9	Total value of acquisitions into Northern Ireland and directly related costs (such as freight and insurance charges) from EU member states in the period (excluding VAT). (Figures entered in this box must also be included in the box 7 total.)

For further information about form VAT 100, see VAT Notice 700/12: how to fill in and submit your VAT Return.

16.4 How to complete box 8 of the VAT Return if you account for VAT using the cash accounting scheme

The value you enter in box 8, should be the total of all EU supplies of goods made in that reporting period (excluding VAT) and not the value of payments received in that period. The total value of entries on your EC Sales List should agree with the value entered in box 8 of your VAT Return (see VAT Notice 731: cash accounting).

16.5 Which VAT accounting period to account for VAT on your acquisitions

You must account for any VAT due on your VAT Return for the period in which the tax becomes due. This is the period when the time of acquisition (tax point) occurs. Paragraph 7.3 provides further information on this. You may also treat this tax as input tax on the same VAT Return, subject to the normal rules for claiming input tax (see paragraph 2.10).

16.6 Records to keep in order to account for tax on your acquisitions

In addition to the normal VAT records you’re required to keep, you must, if you’re involved in buying goods from VAT-registered business in EU member states, keep all of the following records.

Item	Description
1	VAT invoices issued to you by suppliers in EU member states
2	Documents relating to goods acquired into Northern Ireland by you from EU member states
3	Copies of your completed EC Sales Lists (your EC Sales List account) (see section 17)
4	Copies of your Intrastat Supplementary Declarations if applicable (see section 18)

16.7 Record the tax due on acquisitions in your VAT account

You must calculate the VAT due on the acquisition of goods into Northern Ireland from EU member states (see section 7) and enter the total on the ‘VAT payable’ side of your VAT account under the heading ‘VAT due on acquisitions’.

You may then deduct the VAT due on these acquisitions as input tax on the ‘VAT deductible’ side of your VAT account, under the heading ‘VAT deductible on acquisitions’, subject to the normal rules for claiming input tax (see paragraph 2.10).

16.8 Records of goods sent to an EU member state on a temporary basis

If you’re a taxable person and you move goods to, or receive goods from, EU member states on a temporary basis, you must:

Step 1

Keep a register of temporary movements of goods. The register need not be kept in any particular format (see paragraph 16.9) but it must be readily available for all goods temporarily moved to and from Northern Ireland.

Step 2

Include in the register all goods moved between Northern Ireland and EU member states where they are to be returned within a period of 2 years after their first removal or receipt. It would also be advisable to include any goods for which you’re not sure of the date of return.

16.9 Information to record in your temporary movement register

You should record the following.

Item	Information
1	For goods you’re sending out of Northern Ireland - the date the goods were removed
2	For goods received into Northern Ireland from an EU member state – the date the goods arrived
3	The date the goods are returned
4	A description of the goods
5	The reason for the movement (for example process work)
6	The consideration for the supply, if applicable

16.10 Records to keep for removals

If you remove goods to an EU member state you must keep the records and detailed accounts described in the VAT guide (Notice 700). Your records must provide a clear link with the evidence required in this notice. It’s important that you follow the accounting instructions explained in paragraph 16.12 if the goods are not removed or you do not hold evidence to show removal of the goods within the time limits.

16.11 Adjust your accounts if the zero-rate requirements are not met

Whether you or your VAT-registered EU customer arranges for the removal of goods to an EU member state, you can only zero rate the supply in your records when the goods are supplied to your customer and you meet the conditions set out in paragraphs 4.3 and 4.4.

If the goods have not been removed or you do not have satisfactory evidence of removal within 3 months (6 months for goods involved in processing or incorporation before removal) and the goods would be subject to VAT in the UK, you must account for VAT.

If you fail to submit an accurate EC Sales List by the due date and the goods would be subject to VAT in the UK you must account for VAT.

You must amend your VAT records and account for VAT on the invoiced amount or consideration you have received. For a VAT rate of 20% the VAT element would be calculated at 1/6 and for the 5% rate at 1/21.

This VAT should normally be accounted for on the VAT Return covering the time that the failure to meet the obligations arose. For example, at the end of the 3 months in the case of evidence of removal, or the due date of the EC Sales List.

Paragraph 16.12 explains what to do is you subsequently meet the requirements.

To amend your VAT records, you must make an entry equal to the tax on the supplies concerned on the ‘VAT Payable’ side of your VAT account. Include this amount in box 1 of your VAT Return for the period in which the time limit expires. If you do not, you’re likely to be assessed for tax due on the supplies and may incur interest and a financial penalty.

16.12 What to do if the goods are later removed or you receive evidence of removal after you’ve accounted for VAT

If the goods are subsequently removed or otherwise meet the necessary conditions, you may zero rate the supply and adjust your VAT account for the period in which you meet the requirements. This is provided that the goods have not been used before removal, unless specifically authorised.

16.13 When to issue a VAT invoice

You must normally issue a VAT invoice within 30 days of making the supply of:

• standard-rated goods or services to a registered person in the UK
• goods or services, other than exempt supplies, to a person in an EU member state
• goods or services to a non-taxable person in an EU member state (such as a public body, a charity or an unregistered business)
• distance sales of goods (for example mail order) to unregistered persons in EU member states
• new means of transport (motor vehicles, boats or planes) to persons in EU member states

You should also issue a VAT invoice within 30 days of receiving a payment on account from a customer in an EU member state.

If you wish or need to invoice outside this 30 day period you should contact the VAT helpline explaining the full circumstances. But we may refuse permission.

16.14 Whether to issue a full VAT invoice to a VAT-registered customer in an EU member state

A full VAT invoice must always be issued if you wish to zero rate a supply to a customer registered for VAT in an EU member state.

16.15 Information you should show on a VAT invoice

If you make supplies to a customer in an EU country, the VAT invoice you issue must show the following details in addition to the information normally required on a VAT invoice issued to a Northern Ireland customer.

Item	Information
1	The letters ‘XI’ (the ‘identifier’ for Northern Ireland ) as a prefix to your VAT registration number
2	The VAT registration number, if any, of your customer in the EU member state, including the country identifier as a prefix (see paragraph 16.18)
3	In the case of a new means of transport, a description which identifies it as such
4	A reference to indicate that the supply is a zero-rated EU supply of goods

For further information about information normally required to be included on a VAT invoice, see the sections dealing with VAT invoices in the VAT guide (Notice 700).

16.16 What currency to use on an invoice

You can invoice in any currency when you issue VAT invoices for supplies where the customer in the EU member state is registered for VAT and their registration number is quoted on the invoice.

Where UK VAT is chargeable (for example, on distance sales) the sterling equivalent of the amount of VAT, if any, at each rate must always be shown. For further information about this, see the sections dealing with VAT invoices in the VAT guide (Notice 700). See paragraph 8.5 of this notice for information about the exchange rates which may be used.

16.17 Typical VAT invoice for supplies to an EU member state

This is an example of a VAT invoice issued for supplies made to a customer in Germany.
Sales invoice no 174
VAT regd no XI 987 6543 21 To: EIN ANDERHOCHSTRASSEBONN VAT regd no DE 99345195 5 Time of supply 15/02/2021 Date of issue 19/02/2021 Sale
Quantity	Description and price	Amount exclusive of VAT	VAT rate	VAT net
		£	%	£
6 4 6	Radios, SW15 @ £25.20 P/C SM1993 @ £319.20 Lamps T77 @ £15.55	£151.20 £1,276.80 £93.30
		£1,521.30	0	0.00
VAT @ 0%	VAT 0.00
‘Zero-rated EU supply’ *	Total £1,521.30
* This wording is not prescriptive. Similar wording or a reference to the relevant EU or UK law is acceptable.

16.18 Country codes and VAT registration numbers in the EU member states

The table shows the:

• format of VAT registration numbers in each EU member state
• country codes which you should use as a prefix to those VAT registration numbers for your EU customers

Customer’s VAT registration numbers should be verified using the Europa website VIES VAT number validation or by contacting the VAT helpline.

In certain countries for example Spain and Italy, businesses are required to register their VAT number for EU use and if they do not do this, the number will show as invalid on the VIES VAT number validation checker. You may need to contact your customer and advise them to register the number for use.

Businesses identified as trading/operating under the protocol should use the prefix XI to your UK VAT registration number.

EU member state	Country code	Format of VAT number	Number of characters
Austria (1)	AT	U12345678	9
Belgium (2)	BE	0123456789	10
Bulgaria	BG	012345678 or 0123456789	9 or 10
Croatia	HR	12345678901	11
Republic of Cyprus (see paragraph 2.4 for extent of VAT territory) (3)	CY	12345678X	9
Czech Republic (4)	CZ	12345678 or 123456789 or 1234567890	8, 9 or 10
Denmark	DK	12345678	8
Estonia	EE	123456789	9
Finland	FI	12345678	8
France (5)	FR	12345678901 or X1234567890 or 1X123456789 or XX123456789	11
Germany (6)	DE	123456789	9
Greece	EL	012345678	9
Hungary	HU	12345678	8
Ireland (7)	IE	1234567X or 1X23456X or 1234567XX	8 Second character can also be ‘+’ or ‘*’ 9
Italy	IT	12345678901	11
Latvia	LV	12345678901	11
Lithuania	LT	123456789 or 123456789012	9 or 12
Luxembourg	LU	12345678	8
Malta	MT	12345678	8
Netherlands (8)	NL	123456789B01	12
Poland	PL	1234567890	10
Portugal	PT	123456789	9
Romania	RO	01234567890	2 to 10 digits
Slovakia	SK	1234567890	10
Slovenia	SI	12345678	8
Spain (9)	ES	X12345678 or 12345678X or X1234567X	9
Sweden	SE	123456789001	12

Notes

1. First character is always U.
   
2. 9 digits prior to 1 April 2005. Prefix any 9 digit numbers with ‘0’.
   
3. Last character must be a letter.
   
4. Where 11, 12 or 13 numbers are quoted – delete the first 3 as these are a tax code.
5. May include alpha characters, either first, second or first and second.
   All alpha characters except I and O are valid.
   Must be the 11 alpha numeric TVA number, not the 14 digit SERIT number.
   
6. Must be the 9 character Umsatzsteuer Identifikationsnummer (ust - Id Nr) not the 10 character Umsatzsteuer nummer.
   
7. Includes one or 2 alpha characters – either last, or second and last.
   
8. The 10th digit is always B.
   Three digit suffix will always be in the range B01 to B99
   
9. Includes one or 2 alpha characters – first or last, or first and last.

17. EC Sales Lists

17.1 The purpose of EC Sales Lists

All businesses registered for VAT and trading/operating under the protocol have to submit EC Sales Lists for their EU supplies of goods subject to acquisition tax in their customer’s EU member state. The information provided on the EC Sales List is used in to make sure that VAT has been correctly accounted for. It’s a condition of zero rating for EU supplies of goods that you have a valid VAT registration number for your EU customer. The VIES VAT number validation provides an electronic checking facility for all EU member states VAT registration numbers (see paragraph 4.9).

17.2 EU member states and EC Sales Lists

EU member states have EC Sales Lists, but they’re called ‘recapitulative statements’ or ‘summary statements’.

17.3 Who completes an EC Sales List

You must complete an EC Sales List if you :

• make supplies of goods from Northern Ireland to a business registered for VAT in an EU member state, including transfer of your own goods, (see section 9)
• are the intermediary identified as trading/operating under the protocol in triangular transactions between VAT-registered business in EU member states, (see section 13)

You do not need to complete an EC Sales List if you’re involved in triangulation and the goods are exported to a final customer outside the EU, (see VAT on goods exported from the UK (Notice 703). The triangulation simplification measures do not apply in these circumstances.

17.4 How to submit your EC Sales List

(a) Electronically

You may submit an EC Sales List electronically using:

• an online form
• an upload facility for large data (CSV or XML) files
• UN-EDIFACT (to use this method send an email to ECU: [email protected])
• visit the Electronic Data Capture Services for trade specification

The benefits of submitting data electronically include:

• a user friendly system
• front end validation of data (in this instance, identification of errors on screen)
• a facility to view past internet submissions
• a secure system using SSL encryption technology
• time stamped acknowledgement of data submitted

The service is free with registration and enrolment through HMRC online services.

Submitting electronically will help your business by reducing:

• paperwork
• manual entry delays
• manual entries
• time spent on correcting errors
• your administration and thereby your costs

For assistance with the online service you should contact the online services helpdesk.

(b) Paper format

You can also submit your EC Sales List on the paper form VAT101.

17.5 How to get a form VAT101 or VAT101A

You can get a form VAT101 in various ways.

Option	Source
1	If you have internet access you can get copies from GOV.UK (see paragraph 17.6)
2	If you have a low level of EC sales you may be eligible to complete a simplified EC Sales List annually (see paragraph 17.7)

If you run out of space EC Sales List continuation sheet (VAT101A) is available.

17.6 What you can get online

You can complete your EC Sales Lists online, download forms and find help on how to complete them as follows:

• EC Sales List (form VAT101) (an example, including notes on completion, can be found at paragraph 17.10)
• EC Sales List continuation sheet (form VAT101A)
• EC Sales List correction sheet (form VAT101B)
• information on how to report your EU sales

17.7 How often to submit your EC Sales List

This will depend on whether you supply goods or services and for goods the quarterly value (excluding VAT) of those supplies. But there’s no requirement to submit nil EC Sales Lists.

If you	you will
make supplies of goods and the value of those supplies has not exceeded £35,000 (excluding VAT) in the current, or 4 previous quarters	be required to submit an EC Sales List for each calendar quarter ending 31 March, 30 June, 30 September, and 31 December but may choose to submit monthly if you prefer (see also paragraph 17.9)
make supplies of goods and the value of those supplies has exceeded £35,000 (excluding VAT) in the current, or 4 previous quarters	be required to submit EC Sales Lists calendar monthly (If you submit separate EC Sales Lists for branches within your business and the total value of goods supplied from all the branches is more than £35,000, each branch will have to submit a monthly EC Sales List)
supply goods, make annual VAT Returns and: your total annual taxable turnover does not exceed £145,000, and the annual value of your supplies to EU member states is not more than £11,000, and the supplies do not include new means of transport (boats, aircraft and motorised land vehicles – for further information about this, see VAT Notice 728: new means of transport)	be able to apply to the VAT helpline for approval to submit your EC Sales List once a year and agree the due date for sending in your annual EC Sales List
supply goods only (including triangular transactions – see paragraph 13.8), have a low level of EU sales and your total taxable turnover does not exceed the VAT registration threshold plus £25,500 the annual value of your supplies to EU member states is not more than £11,000 the supplies do not include new means of transport (boats, aircraft and motorized land vehicles - for further information about this see VAT Notice 728: new means of transport	be able to apply to the VAT helpline for approval to submit a simplified annual EC Sales List and agree the due date for sending in your annual EC Sales List if you receive approval you’ll be allowed to complete a less detailed EC Sales List, showing only the VAT registration numbers of your EU customers – actual values are not required but you must enter a nominal value of £1 for each entry on the EC Sales List form

17.8 Due date for submitting an EC Sales List

The deadlines for submitting an EC Sales List to HMRC, for all frequencies of submissions and for goods and services are for:

• paper EC Sales Lists – within 14 days of the end of the reporting period
• electronic (online) EC Sales Lists – within 21 days of the end of the reporting period

17.9 Changing VAT Return periods to coincide with calendar quarterly EC Sales List periods

You can find out how to change your VAT Return periods at VAT registration: Changes to your details.

17.10 Copy of the EC Sales List (form VAT 101)

These 3 paragraphs have force of law.

The paper form VAT101 is specified in this section of this notice for the purposes of VAT Regulations (SI 1995/2518), Regulation 22A(2)(a).

The electronic form VAT101 is specified in this section of this notice for the purposes of VAT Regulations (SI 1995/2518), Regulation 22A(2)(a).

The electronic form VAT101 is specified in this section of this notice for the purposes of VAT Regulations (SI 1995/2518), Regulation 22ZZA(2)(a).

17.11 Information you must provide on your EC Sales List

This paragraph and table has the force of law under regulation 22ZZA(2)(b) of the VAT Regulations 1995.

The following table specifies what information you must provide about goods you remove from Northern Ireland under call-off stock arrangements in your EC Sales List.

You must give all of the following information:

Information	Description
Country code	The 2 letter prefix which identifies your customer’s country code, as shown in paragraph 16.18
Customer’s VAT registration number	The VAT registration number of your customer in the EU member state. The table in paragraph 16.19 shows the only acceptable format of EU VAT numbers. We recommend that you check your customer’s VAT registration numbers regularly using the Europa website (see paragraph 17.1)
Total value of supplies in £s sterling	The total value for the appropriate period of: Sales of goods which you have supplied to each customer, leaving the indicator column blank (related services are services which form part of the price of the goods such as freight charges and insurance.) Triangular transactions, entered on a separate line for each customer and using code ‘2’ in the indicator column, and If you make a supply of services to a business which is not registered for VAT in their EU member state because it is below the registration threshold, but which has provided you with evidence that it is in business (for place of supply purposes), you should not include these supplies on your EC Sales List. If you’re completing a simplified annual EC Sales List you must insert £1 in the value column for each entry. If call-off stocks are removed to an EU member state then leave this field blank. Use code ‘4’ in the indicator column for a movement of call-off stocks to an EU member state and code ‘5’ in the indicator column for a return of call-off stocks.
New Intended Acquirer VAT Registration Number	The VAT number of the new intended acquirer if call-off stocks are reassigned to a new intended acquirer. Use code ‘6’ in the indicator column for a change of intended acquirer. Leave this field blank if the line does not relate to reassignment of call-off stocks.

17.12 Penalty if you fail to submit your EC Sales List, send it in late, or make mistakes

If you fail to submit your EC Sales List by the due date (see paragraph 17.8) you may be liable to a penalty of £5, £10 or £15 for each day that you’re late, subject to a maximum of 100 days. The rate applied will depend on the number of times you have been late. You’ll remain liable to penalties without notice until 12 months have elapsed without further default.

If you submit an EC Sales List that contains a material inaccuracy and you fail to tell us, you may be liable to a penalty of £100. Material inaccuracies fall into 3 main categories:

• data is missing from the EC Sales List
• there are factually incorrect lines on the EC Sales List
• an invalid VAT number is used

You will not be liable to a penalty if you can satisfy us that you have a reasonable excuse (see paragraph 17.13).

17.13 The meaning of ‘reasonable excuse’

There’s no legal definition of reasonable excuse but we’ll look closely at the circumstances of each case. If you can show that your conduct was that of a conscientious business person who accepted the need to comply with VAT requirements, then there may be a reasonable excuse.

Genuine mistakes, honesty and acting in good faith are not accepted as reasonable excuses for penalty purposes. The law provides specifically that you do not have a reasonable excuse if you relied on some other person to perform any task for you.

In addition, the fact that you have:

• quoted a VAT number for your customer that does not conform to the published format for your customer’s EU member state as shown in paragraph 16.18
• used a VAT number which we’ve told you is invalid

will not be accepted as a reasonable excuse for the material inaccuracy. In such cases you may also be liable to account for the VAT on any supplies where you have not met the requirements for zero rating (see paragraph 4.3).

17.14 What happens if there are errors

If you submit a paper EC Sales List we will notify you of any errors that we identify on a form VAT104 (EC Sales List Error Report). The computer-generated form is sent to you with a copy of our ‘Helpful hints’ document. The form will show the error lines and the reasons for the errors. Correct the errors in the spaces provided and return the form within 21 days of receipt to the address shown. Alternatively, you can voluntarily submit a VAT101B to notify HMRC of any errors made.

If you submit your EC Sales List online using the ECSL service, any errors are highlighted on screen as you complete the form, allowing you to correct them prior to submission. If you choose to submit the EC Sales List with some errors still remaining, you will be able to correct these errors online, up to 21 days after the date of submission. After that date, the facility will no longer be available and any outstanding errors will be notified to you in writing.

If you submit by CSV or XML you can still use the online correction service to correct error lines identified at the time of submission. Alternatively, if you decide to submit a new file, you must delete the error lines from your original submission within 21 days, using the ‘Correct declaration errors’ page on the ECSL Online Service, to avoid receiving correspondence on this subject.

17.15 How to avoid making errors

When completing your EC Sales List make sure that:

• you check the validity of your customer’s VAT number (see paragraph 4.9)
• the country code and customer number match the format for the relevant EU member state (see paragraph 16.18)
• the value of supplies is in £’s sterling, rounded down to the nearest £, starting from the right hand side of the box (the decimal point and pence have already been entered on the form)
• you enter the total value of each type of sale one entry per customer, per period of submission
• if you supplied goods, you enter the value (including related costs such as freight and insurance charges) of all the goods supplied to that customer (deducting credit notes where appropriate) and leave the indicator column blank
• if you were an intermediate supplier in a triangular sale, you enter the total value of the supplies to each customer (deducting credit notes where appropriate) on a separate line from any other supplies made to that customer and enter 2 in the indicator column
• you enter your customer’s VAT registration number (starting from the left hand side of the box
• you complete the bottom of the EC Sales List form with the number of pages you’re submitting (‘Number of pages to this list’ box) and your declaration including your contact phone number, signature and date
• you retain a copy of the completed EC Sales List for your records
• advise us if you will no longer be making any EU supplies by contacting the VAT helpline

Do not:

• put the country code in the Customer VAT Registration Number box
• enter dashes, spaces, commas or slashes
• enter details for Great Britain, Isle of Man, Canaries, the Channel Islands, Gibraltar, Norway or Switzerland, or any other countries which are outside Northern Ireland or EU
• enter EU customer VAT registration numbers that you think may be correct - check them using the Europa website (see paragraph 4.9)
• alter any of the details on your printed EC sales VAT101 form – if any of the details are wrong, or you have a query, contact the VAT helpline
• send a ‘nil’ return – EC Sales Lists are not required if you have not made any supplies
• include supplies to Northern Ireland customers as these are not EC transactions

17.16 What to do if you’ve made errors

You must tell us about all errors and omissions on your EC Sales List where:

• errors exceed £100
• an incorrect VAT registration number has been quoted
• you have used the wrong transaction type indicator when completing the EC Sales List

Use EC Sales List correction sheet to tell us about any errors you’ve made.

For help with correcting errors contact the VAT Helpline or email the ESL Helpdesk: [email protected].

17.17 Submit separate EC Sales Lists for different parts of your business

You can choose to submit separate EC Sales Lists on paper or online if you have:

• individual branches of your business
• individual companies within a group VAT registration
• self accounting branches within a group VAT registration

You should contact HMRC to arrange to do this. You will be given a 3-digit code for each branch or company in your business. You will need to use this as an identifier when you complete the separate EC Sales Lists. If you wish to submit data online for individual branches you must register each one separately with HMRC online services.

If the total value of goods supplied from all the branches of your business is more than £70,000 (excluding VAT) in the current or previous 4 quarters, each branch will have to submit a monthly EC Sales List.

17.18 Use an agent to send in your EC Sales List

You may use an agent to act on your behalf, but the legal responsibility for the accurate and timely completion and submission of an EC Sales List remains with you.

Any agent can submit an online EC Sales List on behalf of a client but the agent must be registered for VAT and appointed online by the client to act on their behalf.

The client should sign up online, as an organisation, for the EC sales service. An activation PIN will be issued (by post) and once the client has activated the service, they should login to the Government Gateway website and select ‘Manage services’, then ‘Appoint agent’, they should then enter the agents reference number, in order to link their VAT number to the agents online account.

17.19 Completing an EC Sales List if your only EU supplies are triangular transactions

If your only EU supplies are part of a triangular transaction, you’re still required to submit an EC Sales List and this can be submitted online, or by phoning the VAT helpline who will arrange for EC Sales Lists to be sent to you automatically.

17.21 Supplies of goods on the EC Sales List that would be zero-rated if supplied within the UK

You must complete an EC Sales List if you make supplies of goods to a business registered for VAT in an EU member state, including the transfer of your own goods and goods that would be zero-rated if supplied within the UK.

17.22 Goods supplied free of charge to a customer in an EU member state

You’re making a deemed supply of goods and you must include it on your EC Sales List. The value you show is the cost to you of the goods. Samples or gifts may be excluded provided you meet the conditions described in the section dealing with output tax in the VAT guide (Notice 700).

17.23 Distance selling

If you make supplies of goods to customers who are not VAT-registered in EU member states and you’re responsible for delivery of the goods (distance selling – see section 6) do not enter these supplies on your EC Sales List.

17.24 Temporary movements of your own goods to an EU member state

You do not include temporary movements unless the conditions relating to the transfer change (see section 10).

17.25 How to account for credit notes

Deduct the value of the credit note from the value of the supplies made to your customer. If the value of credit notes exceeds the value of supplies show the resulting negative figure using a minus sign.

17.26 Supplies to a ‘taxable person’ in an EU member state if they do not have a VAT registration number

You should only record on an EC Sales List supplies to businesses in EU member states that are VAT-registered and can provide a valid VAT registration number. If you make a supply to a business which is not registered for VAT in their EU member state because it is below the registration threshold, but which has provided you with evidence that it is in business (for place of supply purposes), you should not include these supplies on your EC Sales List. This is because the absence of a VAT registration number would cause it to be rejected.

But in some cases receipt of the supply will result in the business being required to register in their EU member state. If this is the case and a VAT registration number is subsequently given to you, an amendment should be made to the EC Sales List using form VAT101B EC Sales List correction sheet.

18. Intrastat

18.1 The meaning of ‘Intrastat’

Intrastat is the name given to the system for collecting statistics on the trade in goods between Northern Ireland and EU member states. Intrastat replaced customs declarations as a source of trade statistics within the EU. It exists throughout the EU and requirements are similar in all EU member states.

18.2 Supplies of services included in Intrastat

Supplies of services are excluded from Intrastat except where they’re related charges such as freight and insurance and form part of the contract to supply goods.

18.3 EU trade statistics

All businesses carrying out trade under the Northern Ireland protocol with EU member states must declare the totals of their sales and acquisitions on their VAT Returns. Those businesses over a legally set threshold are also required to provide more detailed information on Intrastat Supplementary Declarations. Intra-EU trade statistics are compiled from the Supplementary Declarations and estimations made using the information on the VAT Returns. For details of the current Intrastat threshold see Notice 60: Intrastat general guide.

18.4 How to declare values of EU trade on a VAT Return

All businesses registered for VAT must complete 2 boxes on their VAT Returns showing the total value of goods supplied from Northern Ireland to EU member states and the total value of goods acquired from EU member states, see paragraph 16.3. For further information about this, see VAT Notice 700/12: how to fill in and submit your VAT Return.

18.5 Completion of Supplementary Declarations by larger businesses

Those businesses with a value of trade in goods with EU member states above the Intrastat threshold for either acquisitions or supplies of goods must complete Supplementary Declarations each month. For further information about this, see Notice 60: Intrastat general guide.

18.6 Description of goods for Intrastat purposes

For Intrastat purposes, goods received into Northern Ireland are called arrivals and goods consigned to an EU member state from Northern Ireland are called dispatches. This is because the Intrastat system developed separately from the VAT system and there are some differences in coverage between the 2 systems. For more information about this, see Notice 60: Intrastat general guide.

18.7 Further information or help

For more information about Intrastat requirements, see Notice 60: Intrastat general guide. If you cannot find the answer to your questions there, the VAT helpline will help you. You should make it clear that your enquiry is about Intrastat.

You can also get detailed guidance and updates on Intrastat matters on the Intrastat pages on the UKtradeinfo website.

18.8 Intrastat declarations online

If you want to make Intrastat declarations online, contact the Intrastat helpline. Guidance on submitting your forms electronically can also be found on the Intrastat pages on the UKtradeinfo website.

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Published 31 December 2020
Last updated 2 May 2024 + show all updates

1. 2 May 2024

   Updated to reflect changes to VAT interest that apply to VAT periods starting on or after 1 January 2023.

2. 7 September 2021

   Section 6 has been updated to reflect changes to the VAT treatment of distance selling between Northern Ireland and the EU with effect from 1 July 2021.

3. 3 June 2021

   The address to write to if you are using the simplified procedure has been updated.

4. 25 May 2021

   The address to write to if you are using the simplified procedure has been updated.

5. 2 March 2021

   An image has been added to section 13.1 to show an example of triangulation.

6. 31 December 2020

   First published.