Taxation Bill: After 31 December 2020, Northern Ireland (NI) will have a dual position. It will not be an EU member but will continue to follow the EU Customs Union, Single Market, and VAT rules.
The new Taxation (Post-transition Period) Bill will implement important aspects of the protocol accordingly. A key part of the bill will ensure that EU goods that are imported into NI from the Republic of Ireland will not be subject to checks or customs duties.
In terms of movement of non-domestic goods between Great Britain and NI, customs duty may apply if the goods are “at-risk” of subsequently being moved into the EU. In terms of VAT, the current system will continue to apply.
Use the online form to tell HMRC that you are an NI trader if you are VAT registered, and any of the following apply:
your goods are located in Northern Ireland at the time of sale.
you receive goods in Northern Ireland from VAT-registered EU businesses for business purposes.
you sell or move goods from Northern Ireland to an EU member state.
Recordkeeping: From 1 January 2021, NI VAT-registered business trading with an EU supplier will need to use “XI” as a prefix to their VAT number.
Additionally, you will need to complete an EC Sales List if you are selling to VAT-registered customers in the EU.
Source: Tax Essentials for Advisors