Following the UK’s exit from the EU (“Brexit”), the UK and EU developed the Northern Ireland Protocol (“NI Protocol”) and, subsequently, the Windsor Framework (designed to facilitate smooth trade between Great Britain, i.e. England, Wales and Scotland, and Northern Ireland following Brexit by streamlining the number of checks placed on goods going from Great Britain to Northern Ireland, primarily through the introduction of two “lanes” of travel depending on the final destination of the goods and removing or reducing restrictions currently in place on a number of products). These set out Northern Ireland’s post-Brexit relationship with the EU and Great Britain, in particular the customs requirements for goods shipped from Great Britain to Northern Ireland, which remains part of the UK but shares a land border with the Republic of Ireland, part of the EU. See our earlier blog post here for further background to the NI Protocol and Windsor Framework.
A temporary approach is currently set out under the NI Protocol. However, effective from 30 September 2024, key changes will apply:
- The full UK Internal Market Scheme (“UKIMS“) will take effect for the movement of goods from Great Britain to Northern Ireland, allowing goods to move through either:
- (i) a “green lane”, for goods “not at risk” of onward movement to the EU and where the trader is authorised under the UKIMS, under which full international customs requirements for authorised traders are removed and simplified procedures apply, or
- (ii) a “red lane”, for goods “at risk” of onward movement to the EU and where the trader is not authorised under the UKIMS, which will still have checks; and
- A new set of arrangements for the movement of parcels from Great Britain to Northern Ireland will apply.
For both the full UKIMS and the new parcel shipping regime coming into effect, a distinction will continue to be made between (i) “not at risk” goods and (ii) “at risk” goods. “Not at risk” goods which are in free circulation in Great Britain and shipped to Northern Ireland will not be charged customs duty, but when imported into Northern Ireland from elsewhere (e.g., the EU or third countries), or if the goods were not in free circulation in Great Britain, duty will be charged. The UK Government has also introduced schemes for the reimbursement and waiver of customs duties.
To assist traders with navigating the changes introduced under the Windsor Framework, the UK Government has established the free Trader Support Service (“TSS”), particularly relevant for business to business shipments.
We set out below (1) the impact of the full UKIMS coming into effect and (2) details of the new parcel shipping regime, as well as (3) information on the duty reimbursement and customs duty waiver schemes introduced by the UK Government in relation to “at risk” goods moving from Great Britain into Northern Ireland.
- UKIMS
From 30 September 2024, goods moved from Great Britain to Northern Ireland under the green lane of the UKIMS will be relieved of full international customs requirements and customs duties. In order to fall under the green lane, in addition to the trader being authorised under the UKIMS, goods must be “not at risk”,i.e. not at risk of onwards movement to the EU. If goods are “at risk” then they must travel through the red laneand full EU customs controls, documentary requirements and duties will apply.
Authorised traders moving goods under the green lane of the UKIMS will also be able to benefit from simplified procedures, namely:
- being able to move goods using a bespoke, significantly reduced dataset, drawing on data already typically held within ordinary commercial information, which will be provided upfront to HMRC in most cases via the TSS or a trader’s chosen agent;
- not be subject to customs checks, except where these are required as part of an intelligence-led, risk-based approach by HMRC; and
- not be required to complete a post-arrival supplementary declaration.
In order to be eligible to apply for and be authorised under the UKIMS, the sending business/trader must be established in the UK and must meet all of HMRC’s compliance requirements and records, systems, controls and evidence requirements. HMRC has published the full list of these requirements here.
Any traders who are not eligible to apply for / not authorised under the UKIMS will have to move goods through the red lane, meaning full EU customs controls and duties will apply, but traders may be able to benefit from schemes introduced by the UK Government for the reimbursement and waiver of customs duties to mitigate the effect of having to move goods through the red lane (see further details on this at (3) below).
- New Parcel Shipping Regime
Under the new Windsor Framework regime, from 30 September 2024 onwards, the arrangements for moving parcels from Great Britain to Northern Ireland will depend on the type of movement being made.
Business to business movements will move in line with the same green and red lane processes in place for freight from 30 September 2024:
- “Green lane” – for goods which are “not at risk” of onward shipment from Northern Ireland to the EU single market, which would relieve the trader of full international customs requirements and customs duties. Businesses will need to be authorised under the new UKIMS in order to ship parcels from Great Britain to Northern Ireland via the green lane.
- “Red lane” – for goods which are “at risk” of being sent onto the EU or where the trader is not authorised under the UKIMS, for which usual full EU customs controls, documentary requirements and duties payable would apply.
Any (i) businesses in Great Britain exclusively sending parcels to private individuals in Northern Ireland (business to consumer movement), (ii) private individuals in Great Britain sending goods to businesses in Northern Ireland (consumer to business movement), or (iii) private individuals in Great Britain sending non-commercial goods to private individuals in Northern Ireland (consumer to consumer movement), will not need to be registered for the UKIMS or complete a customs declaration and can instead send goods through an authorised carrier by providing them with certain commercial information. This information will form the basis of the notification requirements.
- Duty Reimbursement and Customs Duty Waiver Schemes
Traders can claim reimbursement on eligible movements of “at risk” goods made since January 2021, provided that they can evidence that the goods were not used or sold in the EU. Further guidance on this scheme is available here.
From January 2024, traders can also seek a waiver for customs duty that might otherwise be charged on “at risk” goods moving from Great Britain into Northern Ireland. These waivers will continue to be available for traders moving goods in the “red lane”. Further guidance on this scheme is available here.
We recommend that businesses involved in sending goods to and from Northern Ireland sign up to the TSS to assist with their trade compliance and keeping up to date with changes as they are introduced. We also recommend checking whether you are eligible for any duty reimbursement or could benefit from any customs duty waivers going forward.
