| | Sell goods to EU consumers (NI) |
| Description | Overview for businesses in Northern IrelandOn 1 July 2021, the EU introduced an optional VAT scheme for the sale of goods to EU customers who are not VAT registered (also known as EU consumers). Instead of having to register and pay VAT in each country you sell to, you can choose to report and pay EU VAT through a single return using the One Stop Shop (OSS). Alongside the introduction of the OSS, the EU abolished distance selling thresholds. This means you may now have distance sales of goods which are subject to destination VAT. If you have an XI VAT registration, you can use OSS to report intra-community distance sales of goods. If you use OSS you will need to charge destination VAT at point of sale. Instead of charging VAT at the UK rate (or home rate), you will charge VAT at the rate where your customer lives. This means there is no import VAT upon arrival in the EU, making it easier for your end customer. |
| Resolution | The OSS is an optional VAT scheme.You can register in an EU member state. Once registered you can report all relevant EU VAT through a single return and make a single payment to the member state you register with. HMRC also plans to provide an OSS portal for businesses trading with the EU under the Northern Ireland Protocol. HMRC guidance on the One Stop Shop schemes (opens in new tab) > Go to Sales, and select New Invoice. In the Customer field, select your EU customer from the list, or type the customer name. If the customer is not a saved contact, select Add a customer to create a record for them. - Enter a Description.
In Goods/Services select Goods (and related services) to apply destination VAT rules. The destination VAT rate will automatically be calculated.  TIP: To make sure that destination VAT calculates, check that you added:
- Destination VAT rules in financial settings
- an EU customer that is not VAT registered
TIP: If you need to add a service item that does not have destination VAT rules, you must create a separate invoice. This is because invoices cannot contain a mixture of home VAT rules and destination VAT rules. Select Save. The VAT returnSales of goods are reported in Box 6 - total value of sales and all other outputs excluding any VAT and Box 8 - Total value of all supplies of goods and related services, excluding any VAT to other EC Member States. The VAT element on destination VAT sales is excluded from your VAT return. You need to report this on your OSS VAT return through the OSS system. Destination VAT reportThe OSS Sales Analysis in Reporting shows all sales where destination VAT has been charged. This will help you to complete your OSS VAT return through the OSS system.
OverviewIf you choose to sell goods to an EU consumer without destination VAT, the VAT is charged at the UK rate (or home rate), and you need to make a customs declaration. Before you start, make sure you have an Economic Operators Registration and Identification (EORI) number starting with XI. HMRC guide to exporting goods from UK (opens in new tab) > - Go to Sales, and select New Invoice.
- In the Customer field, select your EU customer from the list, or type the customer’s name. If the customer is not a saved contact, select Add a customer to create a record for them.
- Enter a Description.
- In Goods/Services select Goods (and related services) for each invoice line. Select the VAT rate that you would apply if the purchase was made in the UK.
Repeat on a new line for as many items as you need to add to your invoice. - Select Save.
The VAT returnSales of goods to all overseas businesses and consumers are reported in Box 1 - VAT due in this period on sales and other outputs and Box 6 - total value of sales and all other outputs excluding any VAT.
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