The Customs (Amendment) (EU Exit) Regulations 2022
Published 8 March 2022
© Crown copyright 2022
This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/doc/open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gov.uk.
Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.
This publication is available at https://www.gov.uk/government/publications/the-customs-amendment-eu-exit-regulations-2022/the-customs-amendment-eu-exit-regulations-2022
Who is likely to be affected
Importers subject to a requirement imposed by HM Revenue and Customs (HMRC) to provide a financial security in relation to customs duty before imported goods can be released to the UK market.
General description of the measure
The measure enables a trader to request a review, or appeal against, a decision by HMRC to require a financial security as a condition of releasing imported goods from customs control in circumstances where the amount of duty due is not clear when a customs declaration is accepted by HMRC. It also updates the relevant customs enforcement legislation.
Policy objective
The measure will make sure the appropriate rights of review and appeal are available to traders and will clarify and update the relevant legislation.
Background to the measure
Customs legislation enables HMRC to make the release of imported goods conditional upon the provision of financial security to cover duty that might be due. While the UK was in the European Union (EU), and during the transition period following its exit, the relevant rules were set out in EU legislation. This was supported by domestic legislation concerning the right of a trader to request a review or appeal to an independent tribunal.
Since the end of the transition period, domestic customs enforcement legislation has allowed HMRC to continue to require financial security from importers in the aforementioned circumstances, but such a requirement is not currently linked to statutory rights to request a review, or to appeal to an independent tribunal. The measure therefore reinstates these rights and updates the relevant customs enforcement legislation to reflect terminology used elsewhere in domestic customs legislation.
Detailed proposal
Operative date
The measure will take effect from 28 February 2022.
Current law
Legislation on the giving of a security as a condition of releasing imported goods where the amount of customs duty due is unclear is in the Customs and Excise Management Act (CEMA) 1979 .
Legislation on review and appeal rights is in Schedule 5 to the Finance Act 1994.
Proposed revisions
The measure will amend Finance Act 1994 to expand the list of reviewable and appealable HMRC decisions to include decisions to require a security under the CEMA provision and will update the CEMA power itself. It will also make consequential changes to other legislation.
These revisions take account of broader legislative changes in relation to customs duty since the end of the transition period following the UK’s exit from the EU. However, they are not intended to change the rules concerning how and when a financial security may be required by HMRC.
Summary of impacts
Exchequer impact (£million)
| 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 |
|---|---|---|---|---|---|
| Empty | Empty | Empty | Empty | Empty | Empty |
Costings, where required, will be subject to scrutiny by the Office for Budget Responsibility and included in their forecasts at a future fiscal event.
Economic impact
This measure is not expected to have any significant economic impacts.
Impact on individuals, households and families
There is expected to be no impact on individuals as this measure only affects businesses. The measure is not expected to impact on family formation, stability or breakdown.
Equalities impacts
It is not anticipated that there will be impacts for those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure will have a negligible impact on a very small number of businesses whose goods are held while HMRC verify the information on the customs declaration. The measure is a continuation of a policy which existed prior to the end of the EU transition period and reinstates the right of appeal to a tax tribunal against the requirement to provide a financial security.
It is not expected that the measure will affect the number of traders who are subject to a financial security requirement. The only impact will be in relation to the new review and appeal rights, and only where a trader chooses to make use of them. In relevant cases, one-off costs would include familiarisation with the process of requesting a review of a HMRC decision and/or appealing to a tax tribunal. There are not expected to be any further one-off or continuing costs.
This measure is expected overall to improve business’ experience of dealing with HMRC as, without it, they will have to apply for a Judicial Review if they wish to appeal against the requirement to provide a financial security to HMRC.
This measure is not expected to impact civil society organisations.
Operational impact (£million) (HMRC or other)
We expect no significant impact on HMRC as this measure is a continuation of a policy which existed before the end of the EU transition period and is only likely to affect a very small number of traders.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
The measure will be monitored through information collected from requests for a review of, or appeals against, HMRC decisions to require a security.
Further advice
If you have any questions about this change, contact Pete Robinson by email at: peter.w.robinson@hmrc.gov.uk.
Declaration
The Right Honourable Lucy Frazer QC MP, Financial Secretary to the Treasury, has read this tax information and impact note and is satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impacts of the measure.