Policy paper

The Customs Importation (Miscellaneous Provisions and Amendment) (EU Exit) Regulations 2021

Published 14 December 2021

Applies to England, Scotland and Wales

1. Who is likely to be affected

This measure will affect drivers and hauliers moving goods imported through mainland Great Britain border locations where customs declarations must be pre-lodged.

2. General description of the measure

The measure places restrictions on the removal of goods from the port or border location they arrive at unless the goods have been discharged to the free-circulation procedure, or their movement is approved by an HMRC officer.

Where HMRC intends to check the goods, that approved movement from the port is subject to conditions, including that the goods are moved to an Inland Border Facility (IBF).

For border locations with limited space and infrastructure to hold all goods on arrival and conduct checks at the border (in particular Dover, the Eurotunnel terminal at Cheriton and Holyhead) these checks must take place inland at IBFs. The measure places obligations on drivers of freight vehicles to move goods selected for inspection to the IBF directly and without the goods being tampered with.

3. Policy objective

The measure will ensure that effective border controls will be in place from 1 January 2022 when full customs controls will apply to goods moving from the EU to Great Britain and is key for border locations where checks cannot be facilitated at the border and goods are required to go to an IBF for an inspection.

4. Background to the measure

The government issued a Written Ministerial Statement on 14 September 2021, confirming that full customs declarations and controls for goods being imported from the EU to Great Britain will be introduced on 1 January 2022. Customs declarations will be risk assessed with the result that a small proportion of imports will need to be checked for fiscal or security risk, or product safety (among other matters). Legislation to achieve customs controls is already in place, taking effect from 1 January 2022. Most ports and border locations have sufficient space for the checks to take place on site. However, for those that have limited space to carry out checks, and which receive a large volume of imports from the EU (in particular Dover, the Eurotunnel terminal at Cheriton, and Holyhead), these checks will take place at IBFs. Some amendments to customs legislation are needed to allow HMRC to exercise customs controls and carry out physical checks of goods at IBFs which are separate locations from UK ports.

While no formally structured consultation has been carried out, HMRC has engaged with stakeholders including industry groups representing hauliers and logistics providers on the development of this policy. An early draft of the requirements was shared with these stakeholders to ensure the proposed measures were proportionate and effective.

5. Detailed proposal

5.1 Operative date

The measure will take effect from 1 January 2022.

5.2 Current law

Part 4, section 42 of the Customs and Excise Management Act 1979 (CEMA) gives the Commissioners for HMRC the power to make regulations covering the movement and removal of goods on their importation.

The main provisions governing the import of goods into the UK relating to this instrument are set out in the Taxation (Cross-border Trade) Act 2018 (TCTA) and the Customs (Import Duty) (EU Exit) Regulations 2018 (SI 2018/1248) (the Import Duty Regulations) made under TCTA.

The Ship’s Report, Importation and Exportation by Sea Regulations 1981 (SI 1981/1260) make provisions relating to unloading, landing or removing goods from their place of landing. There are no existing equivalent provisions for goods arriving through the Channel Tunnel.

5.3 Proposed revisions

This instrument is being laid in exercise of the powers conferred by section 42(1)(b) of CEMA to make regulations on the unloading, landing, movement and removal of goods on their importation. The instrument applies where goods are subject to regulation 131(2) or 131F(3) of the Import Duty Regulations, relating to chargeable goods carried by roll on roll off vehicles destined for roll on roll off listed locations or ships or aircraft destined for other listed locations where pre-lodgement of declarations are required. Those locations are locations where declarations are required to be made prior to boarding the ship, train or aircraft destined for the UK. This includes locations where there is limited space to carry out customs checks for which these checks will be carried out inland.

For goods imported by sea, the Ship’s Report, Importation and Exportation by Sea Regulations 1981 currently provide for restrictions covering the removal of goods from their place of landing. This instrument amends those regulations by establishing the conditions for the removal of goods imported at locations where pre-lodgement of declarations is required. The goods must not be removed from the port unless they have been discharged to the free-circulation procedure, or their movement is approved by an HMRC officer. Where HMRC intends to check the goods, that approved movement from the port is subject to conditions, including that the goods are moved to an IBF. Further conditions of the movement are that the goods are taken directly to the IBF and arrive at the IBF in the same condition as they were at the time of importation.

This instrument makes equivalent provisions for where such goods are imported through the Channel Tunnel Terminal at Cheriton, near Folkestone.

The instrument also makes a further minor amendment to the Ship’s Report, Importation and Exportation by Sea Regulations 1981 to align treatment of goods imported at locations where pre-lodgement of declarations is required at roll on roll off listed locations. Under regulation 8, goods are not to be removed from a port without the approval of an HMRC proper officer. Regulation 8(iv)(bb) creates an exception to that restriction in the case of goods arriving at ‘RoRo listed locations’ under regulation 130 of the Import Duty Regulations. The amendment in this instrument extends that exception to ‘other listed locations’ under regulation 131F of the Import Duty Regulations.

6. Summary of impacts

6.1 Exchequer impact (£m)

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Costings, where required, will be subject to scrutiny by the Office for Budget Responsibility and included in their forecasts at a future fiscal event.

6.2 Economic impact

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

6.3 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.

6.4 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

6.5 Impact on business including civil society organisations

This measure is expected to have a negligible impact on businesses. The requirement to move goods from ports with limited space and infrastructure to IBFs for necessary customs checks will avoid delays at the border and this measure provides the legal obligations that businesses must comply with while the goods are still under customs controls.

One-off costs will include familiarisation with the legislation for which engagement with industry has already occurred. There are not expected to be any continuing costs .

Customer experience is expected to broadly remain the same as the measure does not alter how businesses interact with HMRC.

This measure is not expected to impact on civil society organisations.

6.6 Operational impact (£m) (HMRC or other)

The cost of HMRC’s operational activity in support of this policy will be met from existing resource.

7. Other impacts

Other impacts have been considered and none have been identified.

8. Monitoring and evaluation

This measure will be monitored through information collected from HMRC IT systems and will be kept under review through communication with affected industry groups.

9. Further advice

If you have any questions about this change, please contact John Lazarou: john.lazarou@hmrc.gov.uk.

10. Declaration

The Rt Hon 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.