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Register Your Company in Northern Ireland!
Why are sellers increasingly choosing establish a company in Northern Ireland?
Did you know that by establishing a company in Northern Ireland, businesses can simultaneously take advantage of favourable trading policies from both the EU and UK?
At TBA, we’ve received many enquiries from sellers looking to establish a company in Northern Ireland. So, what do you need to know?
Advantages
EU DAC7 Directive Exemption
The EU DAC7 Directive requires online marketplaces such as Amazon to collect, verify and report data on sellers conducting business within the EU on their platforms.
This includes regularly verifying details such as your identity, tax registrations and financial details.
As Northern Ireland is exempt from DAC7, there is no need to worry about DAC7 compliance checks being conducted on their business, which may otherwise be disruptive to sales.
£90,000 VAT registration threshold
UK VAT registration rules apply – it’s not necessary to register for VAT until your turnover reaches £90,000. Businesses can still voluntarily apply if they want to reclaim input tax.
UK VAT Flat Rate Scheme (FRS)
As Northern Ireland is based in the UK, businesses who register for VAT are eligible to apply for the FRS, which allows them to pay a flat rate of VAT (6.5%) in their first year of registration.
This means that the amount of VAT paid back to HMRC may be lower than what is collected from sales.
EU €10,000 remote sales threshold
As part of the Northern Ireland Protocol, goods that enter and leave Northern Ireland are still subject to EU VAT rules.
This means that the €10,000 distance selling threshold also applies when selling to EU customers – you won’t need to register for VAT in any EU country until you reach the threshold.
Amazon marketplace facilitation
Amazon does not automatically withhold and remit taxes such as VAT for sales made by Northern Irish companies. This grants greater flexibility for companies to self-declare their VAT obligations.
Which taxes are applicable in Northern Ireland?
Value-Added-Tax (VAT)
The standard rate of VAT in the UK applies to VAT-registered businesses – this is currently set at 20%.
A Northern Irish company will be assigned a VAT number with the prefix ‘XI’, which can be verified using the EU VAT Information Exchange System (VIES).
Corporation Tax
The standard rates of Corporation Tax in the UK also currently apply to Northern Irish companies. There are proposals for a separate rate of Corporation Tax, however this has not yet been implemented.
More information can be found from HMRC, or you can contact TB Accountants for tailored support.
Registration process
The general process for registering a company in Northern Ireland includes:
- Choosing the type of company: Limited Liability Company or Partnership
- Choosing a unique company name that complies with UK naming regulations
- Providing a company address in Northern Ireland
- Preparing registration documents, including application forms, company articles, and establishment documents, which usually need to be signed before registration
- Paying registration fees, which will depend on the company type
- Submitting registration documents and payment to the UK Companies House either by mail, online submission, or in person
Registering a company in Northern Ireland can help businesses expand into the EU whilst also taking advantage of UK trading rules. It’s important to note however that like other company registrations, many ongoing compliance obligations will still apply – you’ll need to undergo an annual audit and company confirmation to ensure that your company remains active.
If you’re already established in Northern Ireland, you may also need to consider registering for VAT!
We’re here to help – contact us for a free one-to-one consultation.
Reference:
https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A02011L0016-20240101
https://vat-one-stop-shop.ec.europa.eu/index_en
https://www.gov.uk/vat-flat-rate-scheme
