Brexit Digital & Finance VAT pains – Northern Ireland still in UK VAT System, more red tape & headaches. Is it great again yet?

This brief article / rant contains legitimate information for web developers & designers or anyone else offering digital services into Northern Ireland / United Kingdom, so bear with me.

So we’re already a month into ‘real’ Brexit and we’re already seeing the fallout, from rotting fish stuck on the UK side of the channel, people unable to import cheese or plants from GB into Northern Ireland or the UK bribing.. sorry ‘investing’ 80m+ into Nissan to convince them to stay in GB for some headlines.

Apart from that and the UK being short so many thousands of customs agents that they’ve decided just not to bother checking most goods being imported into the UK from the EU, The UK Government trying to do it’s best Windrush 2.0 attempt with EU citizens being offered money to leave and xenophobic Brexiters barely able to mask their disappointment that non-eu immigration is now going up instead of net immigration going down because afterall, the UK is still hugely dependent on… immigration.

That’s before we get into EU companies now stopping trade to UK customers (someone on twitter has a list of over 275 last time I checked ) or UK customers suddenly shocked to learn that leaving the customs union would bring back…. customs..

All of that was utterly predictable but thanks to the mess of the past few months especially, no one had really any idea how the trade agreement between the UK and EU would actually look on paper for the finer and important details, thanks to much bluffing and convinced the EU would ‘blink at the 11th hour’ the UK dragged on the negotiations until Christmas Eve. To the point that even the fisheries minister didn’t read the agreement, choosing instead to help organise a local nativity scene, because priorities right?

The problem with this is we’re all still figuring out exactly what this trade agreement means and even the ministers themselves don’t seem to understand what it means. If Dominic Raab couldn’t read the Good Friday Agreement before trying to work on the Brexit complexities of Northern Ireland ( a tiny document ), I doubt he or indeed any other minister has fully read the 1,246 page EU Treaty. Neither has the people who wrote it seemingly, as there’s some fairly obvious copy and pasting of old frameworks inside.

One thing that has become clear however, is that Finance & Digital services are not part of this trade deal.

Somewhat controversially, the UK has decided that anyone selling into the UK, now has to register for UK VAT, to charge & collect UK VAT for the government and manage even more paperwork, regardless of income threshold. Note that for UK companies, you need to reach £85,000 of income before being forced into paying VAT.

The UK Tech & Finance industry is in for a shock ( especially the huge amounts of digital agencies that in reality, outsource to cheaper countries like India )

Selling Digital Services to Northern Ireland or UK VAT situation

Whilst Northern Ireland might be still part of the single market for goods and the EU reverse charge still applies for goods, it does not include services. When it comes to services and finance, Northern Ireland follows the UK’s VAT regulations.


Anyone offering digital services into the UK or Northern Ireland now has to register their business in the UK for UK VAT.

Thankfully I found a useful guide here on doing just that

(Important note to mention as seen in article above)

“The one exception to UK VAT registration requirements is for B2B remote sellers. Remote sellers don’t need to register for UK VAT if they sell digital products only to businesses and/or professionals (100% B2B). If you think you fall in this category, we recommend ​you confirm your particular case with the HMRC or a professional tax advisor.

Thats ‘digital goods’ not services. Just remember.

I don’t think this is has quite hit the industry yet as I still don’t see much mention of it besides the legal blogs but it’s going to be a huge pain in the proverbial backside for the entire population of remote workers and outsourced workers and not necessarily good for the UK businesses, this is a fairly complex issue and the continued fallout of Brexit I think, is somewhat masked by most of the economy still being on pause thanks to that virus you might have heard of..

All in all, a complete mess and once again, it’s the little guys left to pick up the mess.

About cwavedave 50 Articles
Always learning & travelling. I help small to medium-sized businesses grow online with web design & connect with their customers with SEO Strategy at my business Creative Wavelength. I also play Cornerback for the Donegal Derry Vipers American Football team.

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