VAT: the Travellers’ Allowances and Miscellaneous Provisions (Northern Ireland) (EU Exit) Regulations 2020
Published 22 December 2020
© Crown copyright 2020
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Who is likely to be affected
People travelling into Northern Ireland (NI) with goods for personal use in their accompanied luggage. Registered mobile operators (RMO) or their fiscal representatives who sell excise goods by retail on board ships or aircraft for passengers to take away at the end of the journey are also affected.
General description of the measure
The measure makes modifications to existing VAT and excise duty provisions in secondary legislation that are necessitated by the United Kingdom’s (UK) exit from the European Union (EU). These modifications allow the UK to meet the requirements set within the Northern Ireland Protocol (NIP). This measure only covers movements into and out of NI.
Policy objective
The measure ensures that the existing EU rules governing excise procedures for RMO, and their fiscal representatives continue to operate efficiently after the end of the transition period. It also ensures that the current VAT and excise travellers’ allowances for passengers arriving into NI from the rest of the world continue to apply at the end of the transition period.
Background to the measure
The UK left the EU on 31 January 2020 and entered a transition period which ends on 31 December 2020. In order to meet the requirements of the NIP, EU legislation will continue to apply in relation to the movements of excise goods into and out of NI.
The current rules around travellers’ allowances and RMO are set out in EU legislation and transposed into UK legislation. Changes to existing UK excise legislation are required to provide for the continuation of a functioning excise regime in NI at the end of the transition period.
Detailed proposal
Operative date
The measure will have effect from the end of the transition period at 11pm on 31 December 2020.
Current law
This current law is contained in the following two instruments:
- the Travellers’ Allowances Order 1994
- the Excise Goods (Sales on Board Ships and Aircraft) Regulations 1999
Proposed revisions
This measure makes changes to existing provisions relating to travellers’ allowances and sales of excise goods on board ships and aircraft.
The Travellers’ Allowances Order 1994
The Travellers’ Allowances Order 1994 is saved and modified so that it continues to apply the current VAT and excise travellers’ allowances in respect of persons entering NI from the rest of the world after the end of the transition period. These amendments include removing reference to ‘the United Kingdom’, which is to be substituted with the words ‘Northern Ireland’.
The Schedule to the Travellers’ Allowances Order 1994 is also modified to include heated tobacco products, which became a new category of tobacco product in the UK in 2018. Heated tobacco products now carry a charge of excise duty for consumption within the UK, including NI. The amendment introduces an allowance of 200 sticks of heated tobacco products that can be carried by a passenger for personal use. This amount is inclusive to the overall amount of tobacco products within the allowance. Without this change, passengers could carry up to £390 of heated tobacco products into NI without UK excise duty being charged.
For passenger movements into NI from GB, the allowances for the rest of the world will apply. Excise duty will be charged on excise goods under section 4 of the Taxation (Post-transition Period) Act 2020.
The Excise Goods (Sales on Board Ships and Aircraft) Regulations 1999
This measure also saves and modifies the Excise Goods (Sales on Board Ships and Aircraft) Regulations 1999, which will cease to apply in GB following the end of the transition period as the RMO regime is an EU facilitation for intra-EU journeys. It ensures that movements between NI and the EU retain their current treatment, whilst different rules for GB will apply. This includes substituting references to “the United Kingdom” with “Northern Ireland”.
The amendments ensure that these regulations continue to apply in relation to goods sold on board any ship or aircraft travelling between NI and the EU and any person registered as a RMO or fiscal representative continues to be treated as such.
A RMO is someone registered by HMRC to ship, import or sell merchandise by retail to passengers on board a ship or aircraft travelling between two EU member states.
This means that for RMO’s or their fiscal representatives operating in relation to journeys between NI and the EU, the status quo is maintained.
Summary of impacts
Exchequer impact (£m)
| 2020 to 2021 | 2021 to 2022 | 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 |
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| +/- | +/- | +/- | +/- | +/- | +/- |
The Office for Budget Responsibility included the impact of EU exit in their Economic and fiscal outlook November 2020, this includes the impact of this measure.
Economic impact
This measure is not expected to have any significant macroeconomic impacts.
Impact on individuals, households and families
This measure will impact individuals bringing heated tobacco products into NI from the rest of the world and GB for their personal use. The measure introduces a new limit of 200 sticks for heated tobacco products. This means that passengers carrying more than this amount will be required to declare the goods and pay the excise duty and VAT on all of the goods in this category, and any other categories of goods exceeded.
Impacted individuals will need to familiarise themselves with the relevant limits and rules.
The measure is not expected to impact on family formation, stability or breakdown.
This measure is expected overall to have no impact on individuals experience of dealing with HMRC as this does not change any processes or tax admin obligations.
Equalities impacts
It is not anticipated that there will be impacts on groups sharing protected characteristics.
Impact on business including civil society organisations
This legislation makes technical fixes to the statute book to implement the requirements of the NIP. An assessment was made of the impact of the NIP in 2019 to support passage of the European Union (Withdrawal Agreement) Act 2020.
This measure is not expected to have any additional impact on businesses, including civil society organisations, aside from familiarisation costs, as this measure is in line with the implementation of the NIP, which is already part of UK law, and as such the impacts have already been considered.
This measure is not expected to impact civil society organisations.
Operational impact (£m) (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 has 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 Nicholas Hampson on Telephone: 03000 576416 or email: nicholas.hampson@hmrc.gov.uk.
Declaration
Kemi Badenoch MP, Exchequer 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.