Policy paper

The Taxation (Cross-border Trade) (Miscellaneous Amendments) Regulations 2024 and The Ship’s Report, Importation and Exportation by Sea (Amendment) Regulations 2024 — customs rules

Published 12 January 2024

Who is likely to be affected

Businesses moving goods to Great Britain (England, Scotland and Wales) from the island of Ireland (Northern Ireland and the Republic of Ireland).

Other businesses involved with these movements of goods, such as ports, carriers, intermediaries, community system providers and hauliers.

General description of these measures

In line with the government’s commitment to provide unfettered access for Northern Ireland businesses to the rest of the UK market, the instrument removes existing customs declaration and notification requirements for qualifying Northern Ireland goods (except in an exceptional subset of cases) which move from Northern Ireland to Great Britain, passing through the Republic of Ireland.

Where goods will be subject to customs requirements and arrive in Great Britain from the island of Ireland, the measures also consist of various customs changes. 

The measures remove temporary customs easements for goods which are imported into Great Britain so that, in future, the customs requirements will be the same as those for goods imported from other EU countries.

The measures also make further technical changes to customs requirements and updates the arrangements for excise goods so that they are consistent with the new customs arrangements.

Policy objective

The measures will ensure that appropriate customs controls and formalities will apply for goods arriving in Great Britain from the island of Ireland, while strengthening the government’s commitments to ensure Northern Ireland’s businesses have unfettered access to the rest of the UK internal market.

Background to the measures

Full customs duty-related controls were introduced on 1 January 2022 for imports from most member states of the EU to Great Britain. In December 2021, the government announced that these controls would not be introduced for goods arriving from the Republic of Ireland, in order to maintain continuity for Northern Ireland businesses (who routinely move goods to Great Britain via the Republic of Ireland).

Instead, transitional arrangements (in the form of the transitional Entry in Declarant’s Records simplified customs declaration process) would remain available for goods moving to Great Britain from the island of Ireland while discussions between the UK and EU on the operation of the old Northern Ireland Protocol were continuing.  

Following agreement of the Windsor Framework, the government announced in the Border Target Operating Model (BTOM) (29 August 2023) that full customs controls would be introduced for goods moving directly from the Republic of Ireland to Great Britain from 31 January 2024, and that legal protections for unfettered access would be further strengthened, to avoid burdens on both direct Northern Ireland to Great Britain movements and indirect movements passing through the Republic of Ireland.

From that date, transitional easements will no longer be available for goods arriving in Great Britain from the Republic of Ireland and they will generally be subject to the same rules concerning customs declaration and presentation as goods arriving from other locations.

Existing customs import requirements will also be removed for qualifying Northern Ireland goods (with only very limited exceptions) which pass through the Republic of Ireland on the way to Great Britain, to further reduce the burden for Northern Ireland businesses using this route.

Detailed proposal

Operative date

These measures will have effect on 31 January 2024.

Current law

The main provisions in relation to customs duty are set out in the Taxation (Cross-border Trade) act 2018 (TCTA) and regulations made under that act. This includes the Customs (Import Duty) (EU Exit) Regulations 2018 (SI 2018/1248) (Import Duty Regulations) which contain provisions in relation to customs declaration of imported goods and the requirement to notify HMRC when goods are imported. These Import Duty Regulations include provisions allowing a customs declaration for goods arriving in Great Britain from the island of Ireland to be made using a simplified process (transitional Entry in Declarant’s Records simplified customs declaration process), and set out rules for that process.

The Customs (Northern Ireland) (EU Exit) Regulations (SI 2020/1605) (Northern Ireland Regulations) provide that certain provisions of TCTA legislation apply in Great Britain for a limited category of goods removed to Great Britain from Northern Ireland. This currently includes goods which are not qualifying Northern Ireland goods under the definition of Qualifying Northern Ireland Goods (EU Exit) Regulations 2020 (SI 2020/1454), goods which are removed to Great Britain from Northern Ireland for an avoidance purpose, excise goods moved from the EU to Great Britain through Northern Ireland, and goods that are moved to Great Britain from Northern Ireland through the Republic of Ireland. 

As well as TCTA, customs requirements are also set out in and under the Customs and Excise Management act 1979. Regulations under this act include the Ship’s Report, Importation and Exportation by Sea Regulations 1981 (SI 1981/1260) (Ship’s Report Regulations). These regulations include rules concerning landing, movement and removal of goods that have been imported to the United Kingdom by sea.

The relevant VAT provisions are contained in the Value Added Tax (Miscellaneous and Transitional Provisions, Amendment and Revocation) (EU Exit) Regulations 2020 (SI 2020/1495).

The relevant excise provisions are contained in the Customs and Excise Border Procedures (Miscellaneous Amendments) (EU Exit) (No.2) Regulations 2021 (SI 2021/1347) and the Excise Duties (Miscellaneous Amendments) (EU Exit) (No. 3) Regulations 2019 (SI 2019/474).

Proposed revisions

The Taxation (Cross-border Trade) (Miscellaneous Amendments) Regulations includes amendments to the Import Duty Regulations to:

• withdraw the transitional Entry in Declarant’s Records simplified customs declaration process so that the same rules apply to customs declarations required for goods arriving in Great Britain from the island of Ireland as apply for declarations of goods from other locations, as have applied from other EU countries since 1 January 2022 — this also means that VAT registered businesses will no longer be required to account for import VAT in their VAT Return for the period in which the import takes place, however these changes will not affect qualifying Northern Ireland goods, except in an exceptional subset of circumstances
• remove the requirement to notify HMRC of the importation of certain goods from the Republic of Ireland which will be replaced with a requirement to notify HMRC that the goods are on their way to Great Britain before the goods arrive

Amendments will be made to the Northern Ireland Regulations to:

• remove customs obligations for many goods arriving in Great Britain from the Republic of Ireland, providing the movement of these goods started in Northern Ireland and the goods ‘merely pass through’ the Republic of Ireland and apply the new requirements to all qualifying Northern Ireland goods, other than an exceptional subset of goods where a customs declaration remains necessary — this includes goods subject to excise duty and goods whose movement is subject to controls under the United Kingdom’s international agreements
• clarify the application of certain requirements in relation to presentation of goods arriving in Great Britain to HMRC

The Taxation (Cross-border Trade) (Miscellaneous Amendments) Regulations will also remove the requirement that further information (in the form of a transitional supplementary declaration) should be provided to HMRC in respect of certain goods that have previously been declared under transitional Entry in Declarant’s Records simplified customs declaration process.

This applies to transitional supplementary declarations that would have become due on or after 31 January 2024, in respect of domestic qualifying Northern Ireland goods arriving in Great Britain from the Republic of Ireland, where the movement of the goods started in Northern Ireland.

The Ship’s Report, Importation and Exportation by Sea (Amendment) Regulations will also be updated to ensure that goods arriving in Great Britain by sea from the Republic of Ireland are subject to appropriate customs controls. In particular, the measures restrict the ability of any person to remove goods from certain ports of arrival in Great Britain without HMRC permission.

For goods moving from the Republic of Ireland to Great Britain, the Taxation (Cross-border Trade) (Miscellaneous Amendments) Regulations measure also removes the ability to delay entering excise goods into an excise duty suspension arrangement (the Excise Movement and Control System (EMCS)) until the time that their arrival is notified to HMRC. Delayed entry into the excise duty suspension system in line with customs arrival notification will remain for movements of excise goods from Northern Ireland to Great Britain. The time of excise duty payment rules will also be aligned with the new customs arrangements on these routes.

Summary of impacts

Exchequer impact (£ million)

2023 to 2024	2024 to 2025	2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029
Nil	Nil	Nil	Nil	Nil	Nil

These measures are not expected to have an Exchequer impact.

Economic impact

These measures are not expected to have any significant macroeconomic impacts.

Impact on individuals, households, and families

There is expected to be no impact on individuals as these measures only affects businesses. There is expected to be no 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

These measures are expected to have a positive impact on businesses moving or receiving qualifying Northern Ireland goods from Northern Ireland to Great Britain through the Republic of Ireland, as it removes the current customs requirements for those goods, except in an exceptional subset of cases.

For direct Northern Ireland to Great Britain movements, there will therefore be no impact on the vast majority of goods movements, which will continue to benefit from unfettered access to Great Britain and are already not subject to any customs checks.

There will be a limited impact on businesses involved in border locations, carrier and haulage companies and those who import goods from the Republic of Ireland through these locations.

Customs declaration requirements for these measures will be the same as for goods arriving in Great Britain from other locations. Businesses have been preparing for these requirements since 2021.

One-off costs for businesses will include familiarisation with the changes. Drivers or hauliers may also need to register for the Goods Vehicle Movement Service, which is a web-based free-to-use service provided by HMRC.

Port operators and carriers who decide to use the service may have to opt into the changes and modify and update their IT systems to be compatible with the HMRC system. This will be supported by HMRC.

Businesses affected by the change may need to provide training for their staff to be able to use the new systems and ensure they know what they need to do.

Continuing costs may include having to monitor for updates to the system and update systems and processes as these arise. Businesses will receive support for this from HMRC.

Penalties could apply to businesses, or individuals employed as drivers, but only if they are transporting goods which failed to arrive for checks or were tampered with, or for failure to comply with instructions given by an HMRC officer. HMRC has been working with external stakeholders to build awareness and capability across the driver community, in order to create a culture of compliance. The penalties are intended to be a deterrent and provide reassurance to compliant drivers and hauliers.

There is not expected to be an impact on civil society organisations.

Operational impact (£ million) (HMRC or other)

There is no significant additional cost to HMRC to deliver computer system changes, as these measures implement changes for goods moving from the Republic of Ireland that were implemented for movements from the rest of the EU in 2022.

HMRC resource will be required to monitor compliance with customs requirements when goods enter Great Britain from the Republic of Ireland, to address the possibility of avoidance of checks on non-qualifying goods.

Documentary checks at the port will be carried out on a risk-based and intelligence-led basis. Border Force officers will be able to ask hauliers to show evidence that the goods they are moving are not subject to customs controls.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

These measures will be monitored through customs information collected through HMRC 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, contact Marcia Harris marcia.harris@hmrc.gov.uk or Ben Dudley benjamin.dudley@hmrc.gov.uk.

Declaration

Nigel Huddleston 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 these measures.