Policy paper

UK Transition: The Customs (Declarations) (Amendment and Modification) (EU Exit) Regulations 2020

Published 29 January 2021

Who is likely to be affected

Businesses and intermediaries importing or exporting goods through Great Britain border locations that do not have existing customs control systems, border location operators, carriers and hauliers involved in the movement of such goods, and travellers carrying goods in accompanied baggage.

General description of the measure

This measure introduces a number of targeted legislative changes that will allow customs procedures to continue to operate efficiently at the end of the transition period and will help facilitate the movement of goods between Great Britain and the European Union (EU). This includes:

• changes that allow HMRC to specify other locations where declarations need to be pre-lodged in advance of arrival, similar to arrangements for Roll-on Roll-off (RoRo) locations (those designed to receive vessels carrying wheeled cargo that can be efficiently rolled on and off), and for temporary easements to customs controls at these locations

• where Great Britain ports have no facilities to process verbal or paper declarations then travellers with personal or commercial goods in accompanied baggage will need to make use of HMRC’s online declaration services (or HMRC’s telephone declaration service where digital assistance is required) to fulfil their customs obligations and help keep passengers and trade flowing smoothly

• maintaining existing customs rules at the end of the transition period to continue to allow HMRC flexibility in specific situations to widen the scope of verbal and by conduct declarations (made by taking a specific action such as using the ‘nothing to declare’ channel at an airport) for goods temporarily imported or exported

• minor amendments to clarify the Great Britain rules for simplified declarations using the entry in a declarant’s records (EIDR) procedure (where simplified declarations are made by traders in their own records)

Policy objective

The amendments will assist businesses adversely impacted by coronavirus (COVID-19) by allowing them additional time to meet their customs obligations and introducing further facilitations whilst making sure that effective border controls continue after the transition period.

Background to the measure

The government announced on 12 June 2020 that border controls for EU goods imported into Great Britain will be introduced at the end of the transition period in stages to give businesses affected by coronavirus more time to prepare.

This instrument concerns changes applying from the end of the transition period which allows goods to move without full customs controls through border locations without existing customs control systems (such as an inventory linked system). This will apply until full controls on goods moving between the EU and Great Britain are introduced from 1 July 2021 under legislation planned for 2021.

The government announced in the Border Operating Model on 13 July 2020 and 8 October 2020 that travellers with either personal (duty and tax free) goods or commercial goods in accompanied baggage will be able to make a customs declaration using an HMRC online declaration.

Detailed proposal

Operative date

Parts of the instrument that relate to pre-lodgement locations will come into effect on 1 December 2020. The remaining provisions will be brought into force using appointed day regulations.

Current law

Legislation listing RoRo locations and the requirements for pre-lodgement of customs declarations is in Part 13 of the Customs (Import Duty) (EU Exit) Regulations 2018. Legislation for notification of importation and acceptance of declarations at RoRo listed locations is in Part 2 of the same regulations. Legislation on goods exported from RoRo listed locations is in Part 6 of the Customs (Export) (EU Exit) Regulations 2019.

Legislation for the simplified customs declaration process is in Part 4, Chapter 3 of the Customs (Import Duty) (EU Exit) Regulations 2018. Legislation covering declarations made verbally, by conduct or in paper form is in Part 4, Chapter 2 of the Customs (Import Duty) (EU Exit) Regulations 2018 and Part 4, Chapter 4 of the Customs (Export) (EU Exit) Regulations 2019.

Proposed revisions

The instrument makes amendments to the Customs (Import Duty) (EU Exit) Regulations 2018 (the Import Duty Regulations) and the Customs (Export) (EU Exit) Regulations 2019 (the Export Regulations). Pre-lodgement of declarations will be required at other locations listed in a notice.

These easements to customs controls will be applied to pre-lodged EU goods imported at the listed locations, meaning they will be allowed to leave the border location without notifying HMRC.

For controlled goods, such as alcohol and tobacco, there will be a requirement on businesses to notify HMRC by its IT system by the end of the working day following their arrival, and this will also include an entry to the Excise Movement and Control System for excise duty suspended goods.

For exports that depart from the listed locations, an arrived declaration will need to be submitted before the goods have left the business’ premises, allowing it to be instantly risked, and a routing provided. Once any documentary checks are completed and, subject to being selected for examination, the goods will be deemed to have been presented and will have permission to be released for export.

Departure messages will not need to be sent to HMRC other than by businesses exporting excise duty suspended goods, where the business or location operator will need to manually confirm to HMRC that the goods have left the UK. Where required, those involved in moving goods (import and export) through the listed locations will need to provide evidence a declaration has be made.

Provisions in the Import Duty Regulations and Export Regulations establish how a declaration can be made by travellers with either personal or commercial goods in accompanied baggage at locations without a red (goods to declare) channel.

Amendments are made to the legislation so that travellers arriving at or departing from these locations will not be able to make verbal or paper declarations, a change that supports separate measures to make advance online declarations mandatory.

Where this is not possible because the traveller needs digital assistance, the declaration may be made via a HMRC telephone service.

The instrument also makes minor amendments to the Import Duty Regulations and the Export Regulations by widening the scope of verbal and by conduct declarations, giving businesses and individuals the necessary flexibility to declare miscellaneous goods that have no direct economic value and are temporarily imported to the UK for a specific situation for example, a major sports event for no more than three months.

The change is necessary to make sure that businesses and individuals will continue to receive the same treatment at the end of the transition period.

Under provisions in the Import Duty Regulations and Export Regulations, businesses and intermediaries that are authorised by HMRC are permitted to make a simplified declaration into HMRC systems or in their commercial records (the EIDR procedure) when goods are imported or exported.

They are then required to subsequently submit a supplementary declaration to HMRC which contains the data required for the relevant Customs procedure, although in certain circumstances that requirement can be waived.

This instrument makes minor amendments to confirm when declarations using the EIDR procedure are accepted, when notification of an EIDR simplified export declaration is treated as occurring and clarify the exceptions to the requirement to make a supplementary customs declaration.

Summary of impacts

Exchequer impact (£million)

2020 to 2021	2021 to 2022	2022 to 2023	2023 to 2024	2024 to 2025	2025 to 2026
–	–	–	–	–	–

Once the UK transitions to its new relationship with the EU 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 provides economic certainty to border location operators, carriers and traders by staging the introduction of customs requirements. The staged approach will give industry extra time to make necessary arrangements and should minimise any delays at UK ports.

Impact on individuals, households and families

This measure will impact on individuals with personal (duty or tax free) or commercial goods in accompanied baggage arriving at ports where there are no red (goods to declare) channels and they will need to make use of the HMRC online declaration service in advance of arriving into, or departing from, Great Britain.

Where this is not possible because the individual needs digital assistance, a telephone declaration service has been set up to supplement the online declaration process. Customer experience is expected to stay broadly the same as it does not change how individuals interact with HMRC. HMRC will provide guidance to help individuals in this.

This measure is not expected to impact on family formation, stability or breakdown.

Equalities impacts

Equality impacts have been considered and HMRC does not anticipate that there will be impacts on groups sharing protected characteristics.

Where travellers are required to make a declaration at Great Britain ports that do not have facilities to process verbal or paper declarations, the availability of HMRC’s online declaration service and HMRC’s telephone declaration service will make sure that all travellers, including those who are digitally excluded or need digital assistance, will be able to fulfil their customs obligations.

Impact on business including civil society organisations

The change extending pre-lodgement and staging border controls is expected to have a negligible impact on location operators and businesses that import or export goods through the listed locations (for example, those without existing control systems).

Businesses making declarations for goods being imported through the listed locations will need to pre-lodge their declarations. This is a matter of timing and does not relate to requirements to make a declaration.

The relaxation of requirements to notify HMRC when goods have arrived or departed will give the operators of these border locations additional time to prepare for full customs controls.

This is due to take effect from 1 July 2021. One-off costs for businesses include familiarisation with the new legislation. There are not expected to be any continuing costs and border location operators will have additional time to establish the automated infrastructure.

The changes maintaining customs rules at the end of the transition period by aligning the potential scope for by conduct declarations and making minor amendments to clarify Great Britain rules for simplified declarations is expected to have no impact on businesses beyond familiarising themselves with the changes.

This measure is expected overall to have no impact on businesses experience of dealing with HMRC. There is expected to be no impact on civil society organisations.

Operational impact (£million) (HMRC or other)

HMRC will not need to put the processes and procedures for full controls in place. Certain processes with resources will be required to support compliance. This resource will mostly take the form of HMRC staff being re-directed from other work.

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, please contact Hayley Harris in the Customs Border Processes and Declarations team by email: hayley.harris@hmrc.gov.uk

Declaration

The Right Honourable 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.