From 1 January 2021, Northern Ireland (NI) continues to follow the EU’s VAT rules for goods. However, as the UK-wide VAT rules for services will apply to NI, NI VAT-registered businesses are required to follow a dual VAT regime from 1 January 2021. This Institute and the NI Tax Committee, chaired by Alan Gourley, have been engaging with HMRC on various Brexit matters, including customs changes and the NI VAT regime during the course of 2020 and extensively on VAT in particular in recent months. We will continue to do so throughout 2021.

In addition to our ongoing discussions with HMRC, the Institute has also raised specific matters of concern in respect of the dual VAT regime with the Department for the Economy, the Irish Government, Revenue and the Directorate General for Taxation and Customs Union.

The Institute has produced guidance on what the VAT changes will mean for ROI and Northern Ireland, and these guides will be updated as more information becomes known. You can find these guides at www.charteredaccountants.ie/brexit.

In December, the UK Government introduced legislation to Parliament (the Taxation (Post transition Period) Bill) which includes how customs, VAT, and excise duty will be dealt with in NI after 31 December 2020, amongst other matters. More guidance can be found in the UK’s policy paper: Accounting for VAT on goods moving between Great Britain and Northern Ireland from 1 January 2021.