04 November 2020 
Andrea Marshall, Tax Specialist
A Policy paper has been issued on Accounting for VAT on goods moving between Great Britain and Northern Ireland from 1 January 2021. This sets out how VAT processes will operate between Great Britain and Northern Ireland on goods sold by VAT-registered businesses.
This does not (as yet) provide all of the answers, but Andrea has summarised the main points below.
Businesses that make some supplies that are exempt from VAT may not be able to recover all of the VAT on goods when they are purchased. Where a business moves goods from Great Britain to Northern Ireland, after not having reclaimed the associated input VAT in full, then there is a possibility that there will be irrecoverable input VAT incurred again on the same goods. To prevent this, businesses will be able to reattribute the previously unrecovered input VAT on the original purchase in Great Britain as if the goods had been used for a taxable purchase. This may be taken into account by businesses when making their annual adjustment.
(Andrea appreciates that the rules for Northern Ireland are different and often more complicated than for Great Britain, so in the BUFDG Guide that is currently being drafted we will be careful to set-out the differnt treatment.)
