Northern Ireland hospitality industry braces for border disruption

The Northern Ireland hospitality sector will not be covered by the extension of the UK's ‘trusted trader’ scheme, which enables traders to self-declare certain goods. The scheme simplifies the customs process and exempts traders from tariffs. 

The UK had announced a temporary moratorium on additional border controls to assist Irish Supermarkets maintain their food supply. However, UK officials have now said that the hospitality industry will not be covered by the beneficial terms. 

Hospitality industry representatives have expressed concern about the increased complexity and cost of new border controls. 

Contention at the border

The current uncertainty around border controls occurs amid a background of a tense diplomatic standoff between the UK and EU.

The initial grace period for Irish Sea border checks was due to expire at the end of March 2021. However, the UK unilaterally announced an extension of the grace period, thereby delaying additional border checks. 

EU officials say the UK’s actions are in breach of the terms of the Northern Ireland protocol. 

Mitigating hospitality hardships 

The hospitality industry’s woes extend beyond Northern Ireland. In recognition of the strain on the industry, the UK recently extended its temporary VAT reduction for the hospitality and tourism sector.

As VAT IT MD Selwyn Stein recently explained, hospitality and events companies have been particularly hard hit by the double whammy of Brexit and Covid-19.  

Stein suggests that while companies are looking to recoup lost revenue, many are overlooking VAT reclaim opportunities. 

“Everyone thinks of VAT as that costly outlay which businesses pay and struggle to ever get back,” Stein said. However, there are actually concrete opportunities to reclaim costs. For example, “there is a significant opportunity for the events industry to reclaim VAT on expenses both here in the UK and when bringing equipment over from the EU and utilizing services.”

However, companies need to ensure they fully understand all the customs and VAT requirements to prevent expensive delays and minimize costs.

Maximize your VAT savings 

As European VAT specialists, VAT IT will ensure that you never miss an opportunity to reclaim VAT. We will also provide expert guidance on customs, duties and import VAT processes, saving you money and preventing delays.