Policy paper

Inland border facilities — changes to port approvals legislation

Published 26 November 2025

Who is likely to be affected 

This measure, which applies to all ports, will affect ports which HMRC assess as having insufficient space within their site boundary to provide and operate essential customs infrastructure. Currently, this will only affect the limited number of ports who benefit from Inland Border Facilities (IBFs). 

General description of the measure 

This measure will amend the existing powers HMRC has to approve ports and apply approval conditions in secondary legislation, including the provision of customs infrastructure. Ports assessed as having insufficient space on-site for customs infrastructure will need to provide equivalent infrastructure at an offsite location, which must be agreed by HMRC. 

Policy objective 

This measure ensures that customs infrastructure is available as required at border locations and that the arrangements for its provision are consistent. It will mean that the small number of ports that currently benefit from government run and funded customs infrastructure will become responsible for providing this infrastructure themselves, in line with the longstanding model used at all other ports.

This will level the playing field between ports while ensuring the checks on goods necessary to protect the UK can continue to take place. 

Background to the measure 

Customs infrastructure is essential to protecting the UK by ensuring risk-based checks on goods entering and leaving the country can take place. Provision of this infrastructure by ports is a long-standing requirement. 

During EU Exit, the government funded and operated customs infrastructure at IBFs, for ports where government assessed that there was insufficient space for this infrastructure within a port’s boundary. Only 2 IBFs remain:

• Sevington IBF in Kent
• Holyhead IBF in Wales 

Government provision of these IBFs was always intended to be temporary. The government published the final version of the Border Target Operating Model (BTOM) in August 2023, which explained that HMRC was exploring options for provision of IBF services on a commercial basis. 

This measure was announced at the Tax update simplification and reform fiscal event on 28 April 2025. A draft of the proposed legislative amendment published on Legislation Day on 21 July 2025.

Detailed proposal 

Operative date 

This measure will have effect from the date of Royal Assent to Finance Bill 2025-26. It will not have any immediate effects on IBF beneficiary border locations. Further secondary legislation, which will affect IBF beneficiary ports, is planned for spring 2026. 

Current law

Current law is included in section 20 and section 20A of the Customs and Excise Management Act 1979 (CEMA 1979). 

Proposed revisions 

Proposed amendments to section 20 of CEMA 1979 clarify that HMRC may specify (via regulations) conditions attaching to approvals requiring the provision of space, facilities and physical infrastructure for essential customs functions including at offsite locations, if HMRC assesses that those facilities cannot be provided within the existing port boundary. Amendments to subsection (1A) will allow HMRC to set conditions and restrictions after an approval has been granted.

Section 20A of CEMA 1979 will be amended to reflect these changes, primarily to include off-site facilities within the definition of ‘approved wharf’ for the purposes of CEMA 1979. 

Secondary legislation will follow to specify conditions and restrictions under the amended provisions. 

Summary of impacts 

Exchequer impact (£ million) 

2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029	2029 to 2030	2030 to 2031
nil	nil	nil	nil	nil	nil

This measure is not expected to have an Exchequer impact.

Macroeconomic impact 

This measure is not expected to have any significant macroeconomic impacts. 

Impact on individuals, households and families 

There is no impact on individuals as this measure only affects businesses. 

Equalities impacts 

It is not anticipated that there will be disproportionate impacts on those in groups sharing protected characteristics as this measure only affects businesses. 

Administrative impact on business including civil society organisations 

This measure is expected to have a significant impact on 3 UK ports (Eurotunnel, Dover, and Holyhead), by requiring them to provide and operate customs infrastructure.

How ports choose to provide infrastructure and recover any costs is a commercial matter, as is longstanding practice at all other ports. One-off costs will include costs for setting up the required infrastructure. Ongoing costs will relate to operating the customs infrastructure. Ports may choose to pass infrastructure costs on to trade, meaning traders pay slightly more to use affected ports and pay for the use of customs infrastructure functions. 

This measure is expected overall to bring these businesses’ experience of dealing with HMRC in line with the status quo at all other ports, by requiring them to take on customs infrastructure requirements. 

There may be one-off familiarisation costs for businesses using routes following any changes implemented by affected ports as a result of this measure. 

Operational impact (£ million) (HMRC or other) 

HMRC will not incur any additional IT or resourcing cost as a result of this measure, which will transfer responsibility for the funding and operation of offsite customs infrastructure from HMRC to the private sector. This will greatly reduce government spending at inland border facilities. 

Other impacts 

Other impacts have been considered and none have been identified.

Monitoring and evaluation 

Funding and provision of customs facilities will be monitored through the existing port approval process. 

Further advice 

If you have any questions about this change, contact Anna Dwyer or Chloe Da Costa at Anna.Dwyer@hmrc.gov.uk or Chloe.Dacosta@hmrc.gov.uk