VATMARG06000 - Buying and selling between Northern Ireland and EU
What does this section cover?
This section, together with Notice 718 The VAT Margin Scheme and global accounting, covers the treatment of transactions between Northern Ireland and EU Member States for all three schemes (margin scheme, global accounting & auctioneers’ scheme).
The margin scheme is operated in broadly similar terms throughout the EU; and sales made under the three schemes to a member-state should be treated in the same way as sales within the UK.
For information on transactions not relating to the margin schemes, you should refer to VATSM and Notice 725 The Single Market.
Goods bought from by businesses in Northern Ireland from businesses in EU Member States
Eligible goods bought by businesses in Northern Ireland under the three schemes from dealers in EU Member States can be entered into the UK scheme. Further details are in Notice 718 The VAT Margin Scheme and global accounting.
HMRC cannot give rulings on VAT regulations in other countries and Northern Ireland businesses should clarify the treatment with their EU supplier before entering goods into the UK margin schemes.
How the EU Invoicing Directive affected invoicing under the scheme
Since 1 January 2004, following implementation of the EU VAT Invoicing Directive (2001/115/EC) in all Member States, margin scheme invoices have had to include a reference to Article 26 or 26a, to corresponding national provisions or to any other indication that the margin scheme will apply.
Customer’s VAT registration number on suppliers’ invoices
The Invoicing Directive gives Member States the option to require that invoices for supplies in their territories must show the customer’s VAT registration number. The UK has not taken up this option but other Member States have. This means that businesses in Northern Ireland may receive an invoice for supplies from EU Member States, which includes both the margin scheme declaration and their VAT registration number. It may not be clear whether the supply has been zero-rated under the supply and acquisition rules, or supplied under the margin scheme.
You may come across such invoices during assurance visits, and they may have been included in the margin scheme. If a margin scheme declaration appears on the invoice, it is likely that the supply has been made under the scheme. However, if you are in any doubt you should check that the business has confirmed with its supplier that the supply has been made under the scheme. If you are still in any doubt that the supply is eligible for the margin scheme, you may wish to check the EU Sales List or send a mutual assistance enquiry through the UK VAT Central Liaison Office (CLO) at VAT International.
Selling goods at auction in another Member State
Goods removed from Northern Ireland for sale at an auction in a member state are classed as transfer of own goods. From 1 January 1993, the transfer of goods within the same legal entity from one country to another is deemed to be a supply of goods for VAT purposes. This remains in force for goods transferred from Northern Ireland to the EU.
Notice 718 gives further information on transfer of own goods. You should also refer to Notice 725.
EC sales lists
Goods supplied under the three margin schemes are taxed in the UK and are not eligible for zero-rating. Therefore, an EC sales list for Northern Ireland and EU supplies will not be appropriate.
Intrastat
For Intrastat purposes, margin scheme goods are subject to VAT in the country of origin. There is no requirement to include them in boxes 8 and 9 of VAT 100 (GOV.UK website) or on a supplementary declaration.
For guidance on Intrastat requirements from 1.1.21 see:
Intrastat declaration requirements for 2021
Guidance on intra EU transactions can be seen in the following public notices:
- Notice 723A Refunds of VAT in the European Union and other countries;
- Notice 725 The Single Market;
- Notice 60 The Intrastat General Guide; and
- The Trade Tariff.