Brexit, what to do now?
The UK officially left the EU on the 31st of January 2020. After reaching a trade deal, and after the transition period ran out, the UK is officially completely out of the European Union as of the 1st of January 2021.
Or, perhaps not as completely as one might assume? One of the issues which garnered a lot of discussion during the trade deal negotiations was the issue of Northern Ireland. After the Troubles, a hard border between the Republic of Ireland and Northern Ireland was to be avoided at all costs. Therefore, different rules apply for doing business with Northern Ireland compared to the rest of the United Kingdom.
England, Scotland, Wales
If your client is located in one of these 3 countries, then the same rules apply if you were doing business with other countries outside of the EU. It does not matter if you are dealing with consumers or business. If you are working on location in these countries, or the client is located here and the work has left the EU (this is applicable in 99% of all trade), then you are allowed to reverse charge the VAT outside of the EU. You do not charge VAT. Please read our FAQ on how to process this in our systems. In contrast to the rules that apply within the EU, you are allowed to reverse charge to both business and consumers. With Business to Business you add the VAT number of your cliënts on your invoice. You do not require the VAT number of your consumers clients.
Northern Ireland (Goods)
Northern Ireland has a special status. The country will remain within the European Common Market for the foreseeable future, but ONLY FOR GOODS. This means that all relevant rules that apply within the Common Market, are also applicable within Northern Ireland. What does this mean for you? If your clients are located within Northern Ireland, you first have to check if you are dealing with consumers or business. If you are dealing with a consumer, you have to check which VAT rate you would charge to a Dutch client. Since you are operating a Dutch business, you have to charge the applicable Dutch VAT Rates. For example, if you are delivering goods to a consumer located in Belfast, and you would charge 21% VAT to a similar client in Amsterdam, you have to charge 21% to this client as well.
Are you delivering goods to another business? In that case, you can reverse charge the VAT just like you would be able to do with any other business located within the EU. Look out! Previously, the United Kingdom used VAT numbers starting with GB and ending in 9 digits (e.g. GB 123456789). However, these are only used now within the UK. Northern Ireland uses separate VAT numbers for doing business with the EU. These start with XI, and have 9 digits as well. In this case, you should ask for a VAT number that looks like the format XI 123456789. To check if you have received a valid VAT number from your clients, you are always able to verify this using the EU's VIES system.
Northern Ireland (Services)
If you are providing services, the above does not apply. Instead, you can handle this transaction just like any other to the rest of the United Kingdom. You can reverse charge to your client instead of charging VAT.