Policy paper

Check if you're trading under the Northern Ireland protocol and what to do

Updated 7 December 2020

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This publication is available at https://www.gov.uk/government/publications/accounting-for-vat-on-goods-moving-between-great-britain-and-northern-ireland-from-1-january-2021/check-when-you-are-trading-under-the-northern-ireland-protocol-if-you-are-vat-registered-business

Under the Northern Ireland Protocol, EU VAT rules will continue to apply in Northern Ireland after the end of the transition period in respect of goods. The only changes are related to the use of the ‘XI’ prefix explained in this paper.

Under the Protocol, transactions in goods between Northern Ireland and EU businesses and consumers will continue as they do today. The same processes and reporting requirements will apply and Northern Ireland businesses intending to make transactions under the Protocol should ensure they are able to continue to operate in this way.

Check if you’re trading under the protocol

You’re trading under the protocol if your business is VAT registered and either:

  • 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 member state

You’ll need to be identified within HMRC’s VAT systems if you’re making transactions that fall within the scope of the protocol.

You’ll be automatically identified as falling within the scope of the protocol if your:

  • VAT registered address has BT postcode
  • VAT registration certificate shows a type of business that is not solely involved in the provision of services

If you’re not identified with HMRC’s VAT systems

You’ll not be eligible for certain VAT simplifications that operate inside the EU and your suppliers may not be able to zero rate goods that they dispatch to you.

You’ll need to notify HMRC if you believe you are trading within the protocol. Further guidance on how to notify HMRC will be published at a later date.

What you’ll need to do

If you are trading and make transactions under the protocol, you’ll need to:

  • put an “XI” prefix in front of your VAT number when communicating with an EU customer or supplier (your invoices will show an XI number ahead of your VAT number - for example, XI 123456789 - instead of GB)
  • complete an EC sales list when selling goods from Northern Ireland to VAT registered customers in the EU

You may also be able to access the EU VAT Refund system in certain circumstances. Check VAT refunds guidance for more information

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