Policy paper

Changes to port approvals legislation

Published 21 July 2025

Who is likely to be affected

This measure, which applies to all ports, will affect ports who HMRC assesses 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 approved 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 Brexit, the government funded and operated customs infrastructure at IBFs, for ports where they assessed that there was insufficient space for this infrastructure within a port’s boundary. Only two IBFs remain: Sevington IBF, in Kent, and 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.

Detailed proposal

Operative date

This measure will have effect on and after the date of Royal Assent to Finance Bill 2025-26, but it will not have any immediate effects on IBF beneficiary border locations. Further secondary legislation, which will affect IBF beneficiary ports, is planned for mid 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 CEMA 1979 will allow HMRC to specify (using regulations) conditions in both:

• 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
• port approvals which must be met while an approval is in place  

Summary of impacts

Exchequer impact (£ million)

This measure is not expected to have an Exchequer impact.

Economic 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.

Impact on business including civil society organisations

This measure is expected to have a significant impact on three 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 or 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)

This measure 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, email anna.dwyer@hmrc.gov.uk or sam.barron@hmrc.gov.uk.