Northern Ireland is still treated as part of the EU single market and customs area to avoid a hard border on the island of Ireland. This means there are different VAT arrangements for goods moving into and out of Northern Ireland to Great Britain.
To reflect these different rules the wording on the VAT return is being changed from today; 8 April 2021. Businesses affected by the Northern Ireland protocol have been implementing the new rules since 1 January 2021. The new wording on the VAT return is designed to assist businesses by using plain language when preparing VAT returns.
The new wording for boxes 2, 4, 8 and 9 and the accompanying notes will be:
Box 2: VAT due in the period on acquisitions of goods made in Northern Ireland from EU Member States. For goods moved under the Northern Ireland protocol only. Show the VAT due (but not paid) on all goods and related services you acquired in this period from EU Member States.
Box 4: VAT reclaimed in the period on purchases and other inputs (including acquisitions in Northern Ireland from EU member states). Show the total amount of deductible VAT charged on your business purchases. Include the VAT reclaimed in this period on imports accounted for through postponed VAT accounting.
Box 8: Total value of dispatches of goods and related costs (excluding VAT) from Northern Ireland to EU Member States. In box 8 show the total value of all supplies of goods and related costs, excluding any VAT, to EU Member States from Northern Ireland.
Box 9: Total value of acquisitions of goods and related costs (excluding VAT) made in Northern Ireland from EU Member States. In box 9 show the total value of all acquisitions of goods and related costs, excluding any VAT, from EU Member States to Northern Ireland.
There are no changes to boxes 1, 3, 5, 6 and 7.
Most software providers should have made the necessary changes to the VAT submission software so that VAT returns will be filed with the new wording, but check that you have updated your VAT software since January 2021.
Written by the Tax Advice Network