Last reviewed 4 October 2023
The Windsor Framework has made changes to the treatment of goods that are moved to Northern Ireland (NI) from Great Britain (GB). GB is England, Wales and Scotland, while the UK is GB and NI. We summarise the timetable of changes introduced.
Some of the changes came into effect on 1 May 2023 and others later in 2023. Further changes will be implemented in 2024 and 2025. The changes that have been or will be introduced are as follows.
1 May 2023
The temporary VAT zero rate that already applies in GB was introduced in NI for the domestic installation of solar panels, insulation, heat pumps and other energy-saving materials. HMRC guidance on this matter can be found at GOV.UK.
In addition, a scheme to facilitate the movement of second-hand cars from GB to NI has been introduced. This allows a UK VAT registered business to reclaim a VAT payment on their VAT return if:
the NI business takes possession of an eligible second-hand car in GB
the NI business moves the vehicle to NI with the intention to resell it in NI or into the EU.
VAT will be due on the sale of the vehicles, and the second-hand margin scheme cannot be used when selling the vehicles. Further details of the scheme are given at GOV.UK.
30 June 2023
A reimbursement scheme has been introduced for EU customs duties paid since January 2021 on “at risk” goods that have been sold or used outside the EU. A duty reimbursement is available on the full amount of duty paid on movements of goods from GB to NI. Where goods are imported from outside the UK into NI, the amount of duty reclaimable is the difference between the EU duty payable and the UK duty, if the EU duty amount is greater than the UK duty amount. A claim can be made only by the importer of record or the agent acting on their behalf. Evidence needs to be provided that the goods were not sold or used in the EU. HMRC has provided an information sheet regarding this which can be found at https://assets.publishing.service.gov.uk.
30 September 2023
The UK internal market expands the number of businesses that can benefit from the removal of EU tariffs and protect internal UK movements of goods. The United Kingdom Internal Market Act 2020 creates Market Access Principles of mutual recognition and non-discrimination to preserve the ability to trade unhindered in every part of the UK. This is being expanded to apply to NI. It is an enhanced trusted trader scheme to enable registered traders to move goods from GB to NI. The changes from the previous scheme are that all businesses in the UK are eligible to register for the scheme (previously restricted to businesses with premises in NI). Also, businesses with a turnover of less than £2 million involved in the processing of goods that they can show stay in NI can join the scheme (previously the limit was £500,000). Businesses that operate over that turnover level can still join the scheme if they move goods for use in animal feed, health care, construction, food production or the not-for-profit sectors. Once registered, the goods moved will be regarded as being in the “not at-risk” category. Existing registrations under the UK Trader Scheme will roll over into the new Internal Market Scheme. Those not currently registered can apply to join at www.nicustomstradeacademy.co.uk.
At the same time, new sanitary and phytosanitary Green Lane arrangements are being introduced to ease the movement of goods from GB to NI. This will include the Retail Movement Scheme for agrifood retail products and also new rules to allow plants to be moved to NI. In addition, seed potatoes will be able to move from GB to NI. There are regulatory and information requirements for the use of the Green Lane. If the goods or information are not compliant, the goods will be treated as passing through the Red Lane and be subject to extra controls, such as inspections, certifications and duty. To access the Green Lane the business must be registered under the UK Internal Market Scheme. Further information on the Green Lane system can be found at https://assets.publishing.service.gov.uk.
The support provided to businesses through the Customs Duty Waiver Scheme is being expanded. The maximum value of duty that can be waived over three years for “at risk” goods moved into NI rises to €275,000 (approximately £235,000) from the current level of €200,000 (approximately £170,000).
The Green Lane for the movement of goods will be introduced for all goods moving from GB to NI. This removes the need for complying with customs rules. Commercial information will need to be provided to allow the authorities to monitor goods movements. In addition, new arrangements will be introduced for the movement of parcels between GB and NI. Data-sharing requirements will be introduced to ensure customs declarations are not required.
Arrangements for the supply of medicines into NI will be introduced. This will mean that medicines available in NI will be those approved by UK authorities. It will enable a single licence and a single pack for medicines right across the UK.
“At risk” goods
A business that brings goods into NI from GB or a country outside of both the EU and UK will need to submit declarations for those goods. Duties may be due depending on the origin of the goods and whether they are “at risk” of onward movement to the EU.
“At risk” goods will be charged the EU duty. “Not at risk” goods will be charged:
no duty if entering NI from free circulation in GB
UK duty if entering NI from outside of both the EU and the UK
UK duty if entering NI from GB and the good was not in free circulation in GB.
Free circulation in GB means goods where all UK applicable duties have been paid or the goods originate in GB.
Whether goods are “at risk” or “not at risk” is determined by the applicable duties and trader certainty of the final destination of the good. Goods will be regarded “at risk” where the applicable EU duty is 3% greater than the applicable UK duty. Goods will also be regarded as “at risk” if the business is not a member of the UK Internal Market Scheme. To be a member, the business needs a good customs and tax compliance record, not have a record of serious criminal offences, be of good financial standing and have a good understanding of their obligations under the Internal Market Scheme authorisation.
Goods are “not at risk” if the applicable EU duty is nil, unless the goods will be subject to additional processing and the additional criteria to declare the goods for processing as “not at risk” cannot be met.
In declaring goods “not at risk” under the UK Internal Market Scheme, the business must be satisfied the goods entered NI for the purpose of being sold or used by end consumers located in NI. Evidence needs to be retained to support this. The goods must also not be Category 1 or Category 2 goods (see Annex IV of Decision of the Withdrawal Agreement Joint Committee on Laying down Arrangements Relating to the Windsor Agreement) if they are to be able to enter the Green Lane. The goods in these categories are prohibited and restricted goods, goods subject to quotas, wild flora and fauna, drug precursors, waste, invasive species and similar goods. For full details of these goods, see Decision of the Withdrawal Agreement Joint Committee on Laying down Arrangements Relating to the Windsor Agreement.
A declaration needs to be made that goods are “not at risk”. The guidance for this declaration can be found at GOV.UK. When using the Customs Declaration Service for the movement of goods from GB to NI, it is necessary to use the Additional Information Code “NIREM” in Data Element 2/2 of the import declaration to declare the goods “not at risk”.
In summary, and as a generalisation, if the following apply, the goods should not be regarded as being “at risk”.
The goods are shipped by a person registered under the UK Internal Market Scheme.
The goods are not banned or restricted.
The goods are “not at risk” of further onward shipment to the EU.
The applicable duty on the goods is at or below the EU duty rates.
These goods should not be subject to many checks and enter through the Green Lane.
From 30 September 2023, these rules apply to goods under the Retail Movement Scheme for agrifood retail products, plants and seed potatoes. From September 2024, this will be expanded to most other goods. From 2025, the supply of medicines will be included. The Red Lane, which will still have routine inspections, is for goods that are for onward shipment to Ireland and the EU.
Trader Support Service
The Government provides a free support service for those who move goods between GB and NI. Guidance for signing up for the Trader Support Service can be found at GOV.UK.