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Setting up warehouse in NI- tax implications

  • 03-07-2020 7:22am
    #1
    MizMix
    Registered Users, Registered Users 2 Posts: 313 ✭✭


    Hi

    Currently run two websites and a shop in Dublin. I'm closing the physical shop to move online. I live near the border and the most suitable storage unit I found was just across the border. Business registered to my home address and any 'marketing' activities which generate sales will continue from here. I still envisage my sales being primarily from Irish customers. However I will need to hire someone who most likely will be local to the warehouse. so i understand i will need to register as a UK employer. Can I continue to trade as an irish co, submit VAT here etc?

    I emailed my accountant and he replied that I will need to sumbit VAT etc in the UK. I have a call scheduled with him next week but I think he thinks i am open to the public which I'm not. Can anyone shed some light- is it black and white as he says? Will I need to register a new co in the UK?


Comments

  • #2
    Calahonda52
    Registered Users, Registered Users 2 Posts: 12,887 ✭✭✭✭Calahonda52


    I don't see the need for UK VAT returns if you are not trading in the UK.
    At the moment its an imaginary line so if you treat the warehouse as it it were in ROI, and your VAT registration already allows you to buy and sell, VAT wise, cross border I don't see any issue.

    If it becomes a hard border with checks, then...

    However I know nothing about tax :)

    UK CT/IT/PRSI is another issue

    “I can’t pay my staff or mortgage with instagram likes”.



  • #3
    MizMix
    Registered Users, Registered Users 2 Posts: 313 ✭✭MizMix


    Thanks Calahonda52 that's what I thought so his email caught me off guard yesterday but then I realised he must think it's a physical shop.

    Yes burying my head in the sand re brexit- could not find anything suitable south of the border.


  • #4
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,629 ✭✭✭✭Marcusm


    Where will the goods originate from? If within the U.K. and they are delivered to a U.K. warehouse then the supplier will charge UK VAT as there is no export of the goods. If you are importing from the EU into the U.K. (this year) and are not UK VAT registered then you will suffer VAT in the relevant EU jurisdiction (not delivering to Ireland therefore Irish VAT registration does not help). If derived from outside the EU then you will have customs & UK VAT reporting obligations.

    In net terms, I doubt that you would be in a position to avoid U.K. VAT registration and reporting (intra EU sales lists etc etc for sales to Ireland).

    This won’t be particularly costly and hopefully will not involve muc VAT cost. The warehouse etc would likely have UK VAT on the rent which you would like to recover. No point in not sorting this out in advance as even where no UK VAT arises on a net basis, you could (needlessly) expose yourself to penalties.


  • #5
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,629 ✭✭✭✭Marcusm


    Calahonda52 wrote: »
    Glad to contribute.
    It's akin to a bonded warehouse from the UK VAT perspective.

    Which would absolutely require registration and returns. Nice and all as it might seem, he cannot simply great it as if it was in Ireland and not the U.K.


  • #6
    MizMix
    Registered Users, Registered Users 2 Posts: 313 ✭✭MizMix


    Hi marcus

    I import from a range of countries- mostly EU and I have some stuff manufactured in China and India. Some of my EU suppliers have recently made me order via UK distributors.

    And yes I don't want to loose the VAT paid on the warehouse- I didn't even consider that

    I'm sure there are accountants around here that deal with this kind of thing so I'll look around- my own accountant doesn't but as I'm a few miles from the border I'm sure there are a lot of companies in a similar situation


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  • #7
    Marcusm
    Registered Users, Registered Users 2 Posts: 10,629 ✭✭✭✭Marcusm


    MizMix wrote: »
    Hi marcus

    I import from a range of countries- mostly EU and I have some stuff manufactured in China and India. Some of my EU suppliers have recently made me order via UK distributors.

    And yes I don't want to loose the VAT paid on the warehouse- I didn't even consider that

    I'm sure there are accountants around here that deal with this kind of thing so I'll look around- my own accountant doesn't but as I'm a few miles from the border I'm sure there are a lot of companies in a similar situation

    If your own accountant is in a border area, I’d be surprised if they could not subcontract the U.K. compliance to a neighbouring firm on the other side if they can’t deal with it themselves. Remember VAT should be capable of being managed by a competent bookkeeper/admin person for a relatively standard buy/sell business.


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