Policy paper

The Customs (Miscellaneous Amendments) Regulations 2021

Published 20 April 2021

Who is likely to be affected

Businesses and intermediaries that use re-useable packaging to protect goods in transport, medical bodies importing or exporting organs for transplant, and passengers carrying excise goods.

General description of the measure

This measure introduces several targeted legislative changes that will allow customs procedures to continue to operate efficiently and will help facilitate the movement of goods. This includes:

• enabling most reusable packaging that protect goods during transportation to be declared for import or export either orally or by conduct and provide flexibility in who can make these declarations
• aligning with EU rules so that the import or export of human blood, organs, tissues and cells for emergency use in transplants or medical procedures can be declared by conduct
• widening the scope of individuals who can make an oral or by conduct declaration on behalf of another person
• ensuring that excise goods intended for commercial use and carried in accompanied baggage are subject to the appropriate customs requirements and goods carried for personal use are not subject to unnecessary checks at the border

Policy objective

To ensure that the UK maintains an effective system of customs controls, including simplifications of customs requirements where appropriate.

Background to the measure

The new UK legislation concerning customs and excise duty took effect at the end of the transition period and border arrangements for EU goods imported into Great Britain (England, Scotland and Wales) have been introduced in 3 stages leading up to 1 July 2021 to give businesses affected by coronavirus more time to prepare.

Following the end of the transition period, HMRC provided a temporary facilitation to allow most reusable packaging to be declared by conduct on import and on export for the free-circulation procedure. A change in this instrument provides a permanent legislative solution that broadly replicates the temporary facilitation.

This will also allow oral and by conduct declarations for the temporary admissions procedure and widen the scope of who can make these declarations. No formal consultation has taken place for these changes but HMRC has been engaged in ongoing discussions with industry stakeholders.

A change to EU legislation was made in July 2020 to allow a declaration by conduct for human blood, blood products, organs, tissues and cells used in grafting, implanting and transfusion in an emergency. Following consultation with the Department of Health and Social Care, HMRC agreed that a similar approach should be taken to ensure equal and timely treatment for patients located in the UK.

Following the end of the transition period, changes were introduced to the declaration requirements for passengers carrying goods in their baggage. These changes inadvertently do not align with the rules for excise goods, which require passengers with goods for commercial use, regardless of value, to submit full import and export declarations. A change in this instrument corrects this anomaly.

HMRC remains in frequent contact with importers, exporters and their representatives in relation to customs matters, including changes to the customs legislation.

Detailed proposal

Operative date

The instrument will take effect from 11 May 2021.

Current law

The instrument is made under the Taxation (Cross-border Trade) Act 2018 (the TCTA). This Act, and the regulations made under it, provide the basis of the UK’s customs rules.

The legislation in relation to oral and by conduct declarations is set out in Sections 2 and 4 of Chapter 2 of Part 4 of the Customs (Import Duty) (EU Exit) Regulations 2018 (“Import Duty Regulations”) and Sections 2 and 3 of Chapter 4 of Part 4 of the Customs (Export) (EU Exit) Regulations 2019 (“Export Regulations”). Both make further reference to the published ‘List of Goods Applicable to Oral and By Conduct Declarations’.

The Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 and the Taxation Cross-border Trade (Special Procedures Supplementary and General Provision etc.) (EU Exit) Regulations 2020, give effect to the ‘Temporary Admission: Eligible Goods and Conditions for Relief’ document, which lists the goods that can be declared to the Temporary Admission procedure.

The legislation in relation to Transit procedures is set out in the Customs Transit Procedures (EU Exit) Regulations 2018.

Proposed revisions

The changes in this instrument introduce new permanent facilitations or concern technical matters and are designed to clarify requirements.

The measure makes amendments to the Import Duty Regulations and the Export Regulations so that most reusable packaging not intended for sale can be declared orally or by conduct for the free-circulation and temporary admissions procedure on import and export.

This widens the scope of a temporary facilitation in place from 1 January 2021 and establishes it as a permanent legislative solution. It also allows greater flexibility as to who can make the declarations for these goods and establishes in the Import Duty Regulations, that goods imported under the revised definition of reusable packaging can do so without a financial guarantee being required.

Further amendments are made to the Import Duty Regulations and the Export Regulations so that human blood, blood products, organs, tissues and cells for grafting, implanting (transplant) and transfusion can be imported and exported in an emergency using a declaration by conduct.

A minor change is made to the Import Duty Regulations so that it references the ‘Oral and By Conduct List’ published on 16 April 2021, which has been updated to include the items covered by the changes to the declaration rules for packaging and organs etc. Other minor changes are made to both the Customs (Special Procedures and Outward Processing) (EU Exit) Regulations 2018 and the Taxation Cross-border Trade (Special Procedures Supplementary and General Provision etc.) (EU Exit) Regulations 2020. This is so they can reference the ‘Temporary Admission: Eligible Goods and Conditions for Relief’ document, also published on 16 April 2021, which ensures consistency of terms used in respect of reusable packaging.

Changes are also included to amend the Import Duty Regulations and the Export Regulations in order to clarify that excise goods in baggage that are intended for commercial use and below the value of £1,500 should be subject to the full customs and export declaration requirements and align with the excise rules. All goods (excise or non-excise) carried for personal use may be declared by conduct, providing there is no liability to VAT or excise duty.

A further change is made to the Customs Transit Procedures (EU Exit) Regulations 2018 to limit when variation and cancellation of listings made under these regulations may take effect. It also includes a minor technical change to those regulations to correct a minor drafting inconsistency.

Summary of impacts

Exchequer impact (£m)

2021 to 2022	2022 to 2023	2023 to 2024	2024 to 2025	2025 to 2026	2026 to 2027
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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.

Economic impact

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

Impact on individuals, households and families

The measure allows individuals carrying goods in personal baggage to declare by conduct where there is no liability to VAT or excise duty, reducing any unnecessary checks at the border. However, it is not anticipated that there will be an impact on individuals as the measure only seeks to clarify the existing legislation to reflect published policy.

Equalities impacts

It is not anticipated that there will be impacts on groups sharing protected characteristics.

Impact on business including civil society organisations

This measure is expected to have a negligible impact on businesses, it introduces several targeted legislative changes that will allow customs procedures to continue to operate efficiently and will help facilitate the movement of goods.

One-off costs for the changes in this measure will include familiarisation with the new rules and could include training for an organisation’s employees and others, such as hauliers and medics, who will be able to make oral and by conduct declarations on their behalf.

There are not expected to be any continuing costs. Continuing savings could include not having to make an electronic declaration for industries that rely on reusable packaging to protect goods during transportation and medical organisations moving life-saving or life-enhancing items.

Customer experience could see an improvement as this measure increases the scope of low risk goods that will not be delayed unduly by customs processes at the border.

There is expected to be no impact on civil society organisations.

Operational impact (£m) (HMRC or other)

Certain processes with resources will be required by HMRC to support compliance. This resource will not be additional. One-off resource costs will be incurred by Border Force on communicating the changes to front-line staff.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

This measure will be monitored through information collected from Border Force and HMRC IT systems and will be kept under review through communication with affected taxpayer groups and other government departments.

Further advice

If you have any questions about this change, please contact Neil Vosper by email: neil.vosper@hmrc.gov.uk.

Declaration

The Rt Hon Jesse Norman 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.