Policy paper

The Excise Duties (Removal of alcoholic liquor to Northern Ireland and miscellaneous amendments) Regulations 2021

Published 18 November 2021

Who is likely to be affected

Businesses moving duty-free spirits and alcohol for denaturing from Great Britain (England, Scotland and Wales) to Northern Ireland.

General description of the measure

This measure makes changes to secondary legislation governing the movement of excise goods by businesses, and more specifically, the movement of duty-free spirits and alcohol for denaturing from Great Britain into Northern Ireland.

The changes implement certain requirements for such movements with the aim to restore the position on the liability to excise duty for these movements to broadly the way it was before the end of the transition period.

In addition, the measure makes minor amendments to secondary legislation on alcohol duty stamps in order to align terminology used across UK law.

Policy objective

The changes made to the legislation will simplify the requirements on applying a relief from excise duty to the movements of duty-free spirits and alcohol for denaturing from Great Britain to Northern Ireland.

Background to the measure

The UK’s exit from the European Union (EU) resulted in some changes to the way the excise duty regime operates, especially in relation to the movement of excise goods from Great Britain to Northern Ireland.

Those changes were implemented through legislation introduced at the end of the transition period in compliance with the Northern Ireland Protocol to the Withdrawal Agreement. This meant that the legal position, in relation to movements of excise goods from Great Britain to Northern Ireland, changed. The introduction of an excise charge on goods entering Northern Ireland, impacted the way relief from UK excise duty could be claimed on the removal of duty-free spirits and alcohol for denaturing from UK approved warehouses for delivery to authorised users in Northern Ireland.

Detailed proposal

Operative date

The measure will take effect from 9 December 2021.

Current law

Under the UK’s duty-free spirits scheme, businesses can receive a relief from UK excise duty for spirits used for medical and scientific purposes as well as certain manufacturing uses. Prior to the end of the transition period, a registered warehousekeeper could remove spirits for such use from UK approved warehouse, for delivery to an authorised duty-free spirits user anywhere in the UK, without payment of excise duty. After the end of the transition period, the introduction of a duty charge on goods entering Northern Ireland meant that spirits must enter duty suspension to avoid the need to pay UK excise duty upon entry to Northern Ireland. This means the goods can no longer be delivered direct to the authorised user and instead must first be consigned to an excise warehouse in Northern Ireland. The relief can then be applied to those goods upon removal from that Northern Ireland warehouse which increases the administrative burden and the financial costs, of supplying duty-free spirits from Great Britain to Northern Ireland. These changes will allow the goods to, once again, be delivered directly to the authorised user duty-free.

In relation to alcohol for denaturing, prior to the end of the transition period, movements of alcohol to a UK licensed or an authorised denaturer operated in a very similar way to duty-free spirits. Goods could be removed from the warehouse without payment of the excise duty and then be delivered to a licensed or an authorised denaturer anywhere in the UK. Denatured alcohol is alcohol that has been made unsuitable for drinking by the addition of approved substances (denaturants), which makes it no longer liable to excise duty. A denaturer is a person authorised by HMRC to denature dutiable alcoholic liquor.

Since the end of the transition period, such movements are required to be delivered to an excise warehouse in Northern Ireland, before being delivered to an authorised denaturer in Northern Ireland. The changes we are introducing will effectively allow alcohol to be delivered directly from Great Britain warehouses to denaturers in Northern Ireland, without the need to first consign the goods to a Northern Ireland excise warehouse upon arrival in Northern Ireland. In other words, it will restore the position to broadly the level that existed prior to the end of the transition period.

This instrument also makes minor amendments to the modifications made to the Duty Stamps Regulations 2006 by the Excise Duties (Northern Ireland Miscellaneous Modifications and Amendments) (EU Exit) Regulations 2020 in order to align some of the terminology with that used across UK law.

Proposed revisions

The changes will relieve spirits from excise duty, arising as a result of section 4(1) of the Taxation (Post-transition Period) Act 2020 (the 2020 Act), on their removal from authorised premises in Great Britain for delivery to Northern Ireland.

For the relief to apply, duty-free spirits moved to Northern Ireland from Great Britain must always be accompanied, from when they are dispatched from a warehouse until the spirits are received by the authorised user, by 2 copies of a signed and dated document which contains the particulars set out in the Schedule to these regulations and details of any excess or deficiency in the spirits delivered.

In relation to alcohol, excise duty charged again as a result of section 4(1) of the 2020 Act, will be relieved upon its removal for denaturing to Northern Ireland from Great Britain. Similar movement documents are required to demonstrate that this is a legitimate movement to a licensed or an authorised denaturer.

There are also 2 minor amendments to the modifications made to the Duty Stamps Regulations 2006 by the Excise Duties (Northern Ireland Miscellaneous Modifications and Amendments) (EU Exit) Regulations 2020. These are as follows:

  • the definition of ‘external territory’ is amended to reflect that the UK is no longer a member state of the EU
  • the references to ‘UK registered consignee’ are replaced by references to ‘Northern Ireland registered consignee’, and a definition of ‘Northern Ireland registered consignee’ is inserted – this is to reflect that the registered consignee scheme applies only in Northern Ireland

Summary of impacts

Exchequer impact (£million)

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

This measure is not expected to have an Exchequer impact.

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 direct impact on individuals, households and families, as the measure affects only 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 on groups sharing protected characteristics.

Impact on business including civil society organisations

A positive impact on business is expected as although the measure implements certain requirements, it will overall simplify the current process for moving duty-free spirits and alcohol for denaturing from Great Britain to Northern Ireland.

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

Operational impact (£million) (HMRC or other)

This measure is not expected to have an operational impact upon HMRC or other government departments.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

The measure will be kept under review through communication and ongoing stakeholder engagement with trade bodies and other representative businesses.

Further advice

If you have any questions about this change, contact Cesar Yanchev on Telephone: 03000 532 030 or email: lachezar.yanchev@hmrc.gov.uk.