Services

Irish & UK Customs & VAT Implications of Exportation to the UK

Irish Customs 

The export of goods from the ROI, or within the EU, to territories outside the EU (ie. UK), must be declared at the Irish/EU point of exit prior to export. In this regard, you need to hold an Irish EORI number in order to declare same. 

Irish VAT 

Where Irish VAT registered traders export to outside the EU, the zero rate of VAT applies. However you are required to hold evidence of export of goods for VAT purposes. 

UK VAT and Customs 

Similar to the importation of goods from the UK to ROI, UK customs duty and VAT obligations arise where goods are imported from the EU into the UK. In order for the goods to clear Customs, one of the following needs to occur: 

  1. Your UK customer arranges for the import of the goods from the ROI to the UK. They will be responsible for any customs duty and/or UK VAT requirements that may arise on importation.
  2. You may decide to take responsibility for this is order for the smooth export of your goods and you business makes the UK Import Declaration for the goods entering the UK.
  • As regards UK Customs, you will be required to hold a UK EORI number and will be required to register for same prior to the UK import declaration. 

You will be required to declare and discharge any UK custom duty that may arise on the imported goods, but are not required to have a UK Company or have a “Permanent Establishment” for UK Corporation Tax purposes. 

You will need to consider whether you will submit import declarations direct or through a third party customs broker, freight forwarder or logistics provider, as many UK and Irish ports operate a roll-on roll-off basis so that goods may have to be declared and customs duty discharged prior to boarding ferries.

  • As regards UK VAT on importation of goods into the UK, you will be required to hold a UK VAT number in order to recover UK VAT charged on importation of goods and then will be required to charge UK VAT on the onward sale to your UK customer. Therefore UK VAT registration is needed, filing of UK VAT returns and UK invoicing requirements, creating additional administrative requirements. Again, a UK establishment is not necessary. 

The HMRC have announced a deferral on the payment of UK Import VAT however the conditions of same have yet to be finalised.

Conclusion 

In the event of a no-deal/hard Brexit and the UK leave the EU common market, your business will be impacted by additional Customs and VAT requirements. 

Where you export goods to the UK, your business will need to consider the implications of acting as both the Irish exporter and UK importer with regard to UK Customs Duty and VAT. You will have to consider your business’s profitability, cash flow and supply chain requirements in order to determine if the benefits of passing these additional costs on to your UK customer outweighs the cost of you incurring same.

Return to the Tax Issue - March 2019

Team Members

Ronan McGivern

Taxation Partner

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Mairead O'Grady

Taxation Partner

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