In terms of EU VAT rules, Northern Ireland businesses are in a unique position whereby the regulations continue to apply to the movement of goods between Northern Ireland and EU Member States, unlike for the rest of the UK.
In today’s article we’ll be highlighting the importance of adhering to the requirements for zero-rating your Intra-EU dispatches. Ensuring that you meet all of the conditions is not just about compliance, but it’s also critical to safeguarding your business from potential HM Revenue and Customs (HMRC) audits.
When to apply the zero-rating
It is important to note that not every EU dispatch is automatically zero-rated. There are certain conditions that need to be met for zero-rating to apply. One of these conditions is obtaining and retaining transport documentation to prove that the goods have left Northern Ireland. This can take the form of a CMR note, a bill of lading or airfreight documents.
Sometimes this can be complex, especially if the customer is collecting the goods or instructing the freight forwarder. Nevertheless, it’s the supplier’s responsibility to ensure these documents are obtained and retained to support the zero-rating.
Lack of sufficient evidence can lead to HMRC raising assessments and concluding that 20% of VAT should have been applied to the sale. This can result in HMRC also charging penalties, and interest.
Our recommendations
Sumer NI recommends that you carry out regular reviews and updates of record-keeping practices and engage with VAT experts to conduct periodic checks to ensure all documentation is in order.
If you have any questions or need further assistance, feel free to reach out to our specialist VAT team.
Remember, meticulous record-keeping is not just a regulatory requirement but a crucial step in securing your business’s financial health. Stay compliant and confident!
Let’s work together to maintain compliance and avoid any potential pitfalls.
