Setting up a UK registered business to avoid VAT

usainbolt

I want to set up and register a business in the UK/NI and sell goods to the end consumer in the Republic of Ireland. I want to do so because the goods I sell are zero VAT rated in the UK but rated at 21% in the Republic of Ireland.

Is this possible and what criteria would I need to fulfil to be eligible to set up a business in the UK/NI?

Thanks.

Alan Shore

Are the goods zero rated because they are an intra EU acquisition ie between 2 VAT registered parties.

If the goods are supplied to a UK private individual what is the VAT rate that applies?

beeftotheheels

If you're even thinking about setting up a business in the UK you need to get proper UK tax advice from a qualified UK tax adviser and you need to get an Irish tax adviser to look at the Irish issues because a structure based on tax arbitrage is likely going to be frowned upon by one or both of the jurisdictions involved and as such you won't easily be able to pick up the phone to Revenue and ask them a few questions.

Off the top of my head your issues would be

Will the business in the north constitute a PE giving you a taxable presence for UK income tax/ corporation tax?
Business structure, company, branch etc
Double taxation relief
How robust is the technical analysis of the VAT arbitrage, could HMRC challenge it?
How robust is the structure designed to benefit from the arbitrage? Could Revenue challenge it?

Tax arbitrage is all well and good, but you need to make sure that every i is dotted and every t is crossed before you do it, and you need to consider all other tax risks associated with it because you can assume the authorities will not smile on it.

namenotavailablE

I'd also guess that this activity would possibly fall under the distance selling VAT rules. As per beeftotheheels, it's essential to get proper advice rather than rely on the 'thinking aloud' of an online forum before embarking on such an enterprise.

beeftotheheels

namenotavailabl wrote: »

I'd also guess that this activity would possibly fall under the distance selling VAT rules. As per beeftotheheels, it's essential to get proper advice rather than rely on the 'thinking aloud' of an online forum before embarking on such an enterprise.

To tell you the truth I was more concerned with the likes of Halifax (Court of Justice) or Cussons (Irish High Court) or IDT card services (UK Court of Appeal and involved Irish UK VAT arbitrage where the UK was actually not out of pocket, Ireland was yet the CoA allowed HMRC to VAT the payments pretty much because no one else was) if the structure was being set up based on rumors on the internet and a basic grasp of tax arbitrage!

usainbolt

Thanks for the replies guys, I will take yere advice and get some independent advice.