Breaking down barriers: How the Windsor Agreement is changing the VAT rules for Northern Ireland

Brexit VAT news! The United Kingdom and the European Union have reached a post-Brexit trade agreement regarding Northern Ireland after years of discussion.

The Windsor Agreement introduced some much-needed changes to the VAT rules for Northern Ireland.

Northern Ireland is closely bound by EU VAT rules on goods, meaning it couldn't benefit from certain VAT rate changes like the 0% VAT rate for heat pumps and solar panels that applied to Great Britain.

However, under the new and improved Windsor Framework, a list of goods for consumption in Northern Ireland will now be exempt from EU rules on VAT rates in certain circumstances! This means that the UK Government will be able to introduce legislation to apply the zero-rate of VAT to energy-saving materials like solar panels and heat pumps.

In addition, the agreement also paves the way for other UK-wide VAT changes to apply in Northern Ireland, with a forward-looking mechanism in place to address any future issues and manage policy differences between the UK and the EU.