VAT and goods in Northern Ireland

Northern Ireland is part of the UK VAT system, but under the Windsor Framework it follows EU VAT rules for goods. A VAT registered business that holds goods in Northern Ireland, buys goods into Northern Ireland from VAT registered EU suppliers, or sends goods from Northern Ireland to the EU must tell HMRC and use an XI prefix on its VAT number, so its EU trade is treated as dispatches and acquisitions rather than exports and imports.

What does the Windsor Framework change for VAT on goods?

HMRC describes the position in one sentence: the Windsor Framework means Northern Ireland benefits from the same VAT rules as the rest of the UK while aligning with certain EU VAT rules on goods. HMRC collects the VAT, the same VAT return is used, and the UK rates apply. What changes is the treatment of goods moving between Northern Ireland and the EU. Those movements are not exports or imports. They are dispatches (sales from Northern Ireland to the EU) and acquisitions (purchases into Northern Ireland from the EU), and the Principal VAT Directive (2006/112) is the underlying EU law.

The UK law is in the Value Added Tax Act 1994, Schedules 9ZA and 9ZD. HMRC’s guidance on movements of goods between Northern Ireland and the EU replaced Notice 725. Services follow the normal place of supply rules in Notice 741A. “Import” and “export” are kept for goods coming from or going to places outside the EU. For the basics of output and input tax, see how VAT works.

Who needs an XI VAT number?

You need a VAT registration number starting with XI to trade under the Windsor Framework. HMRC says you are eligible if any of these apply:

• your goods are located in Northern Ireland at the time of sale
• you receive goods in Northern Ireland from VAT registered EU businesses for business purposes
• you sell or move goods from Northern Ireland to an EU country

You tell HMRC through its online service using the sign in details from your VAT registration, your VAT number and your business name. HMRC then emails to confirm you are recorded as operating under the Windsor Framework. From that point you put XI in front of your usual number, for example XI 123456789 instead of GB 123456789. It is the same registration, not a second one, so you still need to be registered for UK VAT in the first place under the normal VAT registration threshold rules.

Being identified lets your EU suppliers zero rate goods they send you and lets you report EU trade as acquisitions and dispatches. The XI number must appear on all documents used with EU customers and suppliers, such as invoices. HMRC warns that otherwise you may pay or charge the wrong VAT.

If you stop selling or moving goods in Northern Ireland, you can revoke the status, but you must first complete any outstanding One Stop Shop union scheme returns, EC Sales Lists and EU VAT refund claims, because you cannot complete them afterwards.

How are sales from Northern Ireland to EU businesses taxed?

A supply of goods from Northern Ireland to a business customer in an EU member state is zero rated where the customer is VAT registered in an EU member state and has given you that number, the goods are sent or transported out of Northern Ireland to an EU member state, and you submit an EC Sales List accurately accounting for the supply. You show the customer’s EU VAT number, with its country prefix, on your invoice and keep valid evidence that the goods left Northern Ireland. Where the customer arranges collection, HMRC suggests taking a deposit equal to the VAT until evidence arrives.

You must not zero rate a sale to a UK VAT registered customer, even if the goods later go to the EU, unless that customer is also registered for VAT in an EU member state and the conditions are met. If you fail without reasonable excuse to obtain the customer’s VAT number or to submit an accurate EC Sales List, zero rating is not permitted. The value of these dispatches goes in box 8 of the VAT return, as well as in box 6.

What about sales from Northern Ireland to EU consumers?

Sales to EU customers who are not VAT registered are distance sales. Since 1 July 2021 there has been a single EU wide threshold of £8,818 (€10,000) for the total of these sales across all member states. Below it you charge UK VAT. Once your distance sales exceed it, you must account for VAT in each member state the goods are sent to, either by registering in each one or by using the One Stop Shop union scheme, which lets you file a single quarterly return for all your EU distance sales. Excise goods such as alcohol and tobacco require registration in the member state whatever their value.

How are purchases from EU suppliers handled?

An acquisition happens when goods move from an EU member state to Northern Ireland, they are received by a VAT registered business, and the supplier is VAT registered in the member state of departure. The supplier zero rates the sale and you account for the VAT yourself on your return: the VAT due goes in box 2, the net value in box 9, and you can normally reclaim the same amount as input tax in box 4 on that return, subject to the usual input tax rules.

The time of acquisition is the earlier of the 15th day of the month after the month in which the goods were sent to you, and the date the supplier issued its invoice. A payment on account does not create a tax point, unlike the general rules in time of supply for VAT. The rate is the UK rate for the same goods, so goods zero rated here carry no acquisition VAT.

Watch the fallback rule: if you quote an XI number but the goods are delivered to another member state, acquisition VAT is also due in the UK, is never deductible as input tax, and is refunded only once you show VAT was accounted for in the country of arrival. A Northern Ireland business that is not VAT registered simply pays VAT under the rules of the supplier’s member state.

What happens when goods move between Great Britain and Northern Ireland?

HMRC’s guidance says import VAT may apply to goods entering Northern Ireland from Great Britain, and broadly the same applies the other way, but that for most movements by individuals and non VAT registered businesses no action is needed. Where a VAT registered business carries the goods, any import VAT is declared and reclaimed on its VAT return, giving a nil net effect, and the business should document the movements in its records.

For individuals, import VAT arises on goods carried across that did not bear equivalent VAT when bought and total more than £390. The Retail Export Scheme survives in Northern Ireland for visitors resident outside the EU and Northern Ireland, but is not available in Great Britain.

How are goods from outside the UK and EU treated in Northern Ireland?

Goods brought into Northern Ireland from outside the EU are imports. Import VAT is charged at the same rate as a UK supply and VAT registered businesses can use postponed VAT accounting. For consignments of £135 or less sold directly to customers in Northern Ireland from outside the UK and EU, import VAT is charged rather than supply VAT at the point of sale, and low value consignment relief (the old exemption for goods worth £15 or less) has been removed. If an online platform is involved, see online marketplaces and overseas sellers. Onward Supply Relief can apply where goods are imported into Northern Ireland from outside the UK and EU and are destined for an EU country.

Can you show how this works in practice?

Illustration only. A Belfast manufacturer, registered for VAT and identified as trading under the Windsor Framework, sells goods worth £10,000 to a VAT registered customer in Dublin. It records the customer’s IE VAT number on the invoice, keeps the haulier’s evidence of removal and reports the sale on its EC Sales List. The sale is zero rated and £10,000 goes in boxes 6 and 8.

In the same quarter it buys components worth £4,000 from a German supplier. The goods are sent on 5 March and invoiced on 20 March. The time of acquisition is 20 March, the earlier of the invoice date and 15 April. At the 20% standard rate it enters £800 in box 2, reclaims £800 in box 4 (the components are used in its taxable sales) and enters £4,000 in boxes 7 and 9. The net effect is nil, but the figures must be reported.

What are the common mistakes?

• Quoting a GB number to EU trading partners. Without the XI prefix, EU suppliers may charge their local VAT and EU customers cannot verify your status.
• Zero rating without evidence. A customer’s VAT number is not enough on its own; you need proof the goods left Northern Ireland and an accurate EC Sales List.
• Applying the goods rules to services. The Windsor Framework alignment covers goods. Services follow the normal UK place of supply rules.
• Revoking XI status too early. Outstanding OSS returns, EC Sales Lists and EU refund claims cannot be completed after revocation.

See also Making Tax Digital for VAT and VAT invoice requirements.

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Related Accountapedia entries

• Selling goods to EU customers after Brexit
• How to check a VAT registration number
• Filling in a VAT return: the nine boxes
• EORI numbers: who needs one
• VAT on digital services to overseas consumers
• UK Internal Market Scheme for goods into Northern Ireland

Sources

• GOV.UK: How vat will apply to goods moving between great britain and northern
• GOV.UK: Vat on movements of goods between northern ireland and the eu
• GOV.UK: Selling or moving goods between northern ireland and the eu
• GOV.UK: How to fill in and submit your vat return vat notice 70012
• GOV.UK: Register vat eu countries
• GOV.UK: Charity funded equipment for medical and veterinary uses notice 7016
• GOV.UK: Vat imports acquisitions and purchases from abroad
• GOV.UK: Vat and overseas goods sold directly to customers in the uk
• GOV.UK: Vat charities

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.