Policy paper

Northern Ireland Steel Import Duty

Published 3 March 2021

Who is likely to be affected

This measure will affect businesses who move steel which originates from countries outside the EU and the UK into Northern Ireland.

General description of the measure

This measure will enable businesses who move steel originating from countries outside the EU and the UK into Northern Ireland to access the UK safeguard quotas or an equivalent in-quota tariff treatment provided there is a relevant EU tariff rate quota and it is open. This means such steel imports will not be subject to the EU out-of-quota safeguard tariff where there is capacity in the relevant quota.

The measure also provides that existing powers to make secondary legislation, contained in the Taxation (Cross-border Trader) Act 2018, can, with appropriate Parliamentary engagement, be used to extend the measure retrospectively to other goods which, like steel, would otherwise be subject to prohibitive EU out-of-quota rates, provided any retrospective provision does not impose or increase taxation.

Policy objective

The government wants to ensure that Northern Ireland importers can continue to move Rest of World (RoW) steel – steel which is not of EU or UK origin - without being subject to prohibitive EU out-of-quota safeguard duties when there is still capacity in relevant quotas.

The government will meet this objective by providing Northern Ireland steel importers with access to the UK safeguard quotas or an equivalent in-quota tariff treatment where there is no UK safeguard measure, provided that there is a relevant EU tariff rate quota and it is open.

Background to the measure

This measure is being implemented to ensure Northern Ireland importers can continue to import RoW steel without being subject to prohibitive EU out-of-quota safeguard duties. The measure does not affect EU origin steel, and HMRC has implemented an interim arrangement to allow UK origin steel to move into Northern Ireland and benefit from the EU’s UK specific tariff rate quota. However, legislation is needed for steel that originates from countries outside the UK and EU. A combination of various events make this legislation necessary:

• the EU has put in place safeguard Tariff Rate Quotas (TRQs) for non-EU origin steel goods - the in-quota rate is 0%; the out-of-quota rate is 25% - these safeguards are a type of trade defence measure
• the Withdrawal Agreement Joint Committee Decision on “at risk” goods means that goods subject to EU trade defence measures cannot be declared “not at risk” unless, for goods imported from UK, the applicable EU duties would be zero, or for goods imported from RoW, the EU duties are equal to or less than UK duties - this means that, because of the EU’s safeguarding charge, all steel entering Northern Ireland from RoW is “at risk” and subject to EU tariffs
• the EU unilaterally implemented a new regulation last year which purports to prevent EU TRQs being accessed when goods enter free circulation in Northern Ireland

Taken together, this means that without action, RoW steel imported into Northern Ireland, or moved into Northern Ireland from Great Britain would be subject to the EU’s out-of-quota rate of 25%.

Detailed proposal

Operative date

Some elements of the measure will have retrospective effect from 11pm on the 31 December (the end of the Transitional Period).

Current law

Current relevant law is contained in:

• Sections 30A-C and sections 40A-B into Part 1 and Part 2 of The Taxation (Cross-border Trade) Act 2018 (TCTA), inserted by the Taxation (Post-transition Period) Act 2020 (TPP)
• Reg 4, 6, 7, 10, 12 and 13 of The Customs (Northern Ireland) (EU Exit) Regulations 2020 (the Northern Ireland SI)
• the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019/449, in particular regulations 47(2) and 52(4)

Proposed revisions

The application of UK steel safeguard measures, made by public notice under regulations 47(2) or 52(4) of the Trade Remedies (Increase in Imports Causing Serious Injury to UK Producers) (EU Exit) Regulations 2019/449, to RoW steel imports into Northern Ireland and movements of RoW steel from Great Britain to Northern Ireland which are not domestic goods, where the goods would have benefitted from EU tariff-rate quota under EU steel safeguarding measures had those goods been imported into an EU member State. This will have effect from 3 March 2021.

The EU steel safeguarding measures will not apply when calculating the duty charged for Great Britain to Northern Ireland movements of RoW steel, which are domestic goods, where the goods would have benefitted from EU tariff-rate quota under EU steel safeguarding measures had those goods been imported into an EU member State. Including provisions about claiming the treatment and requiring a notification in relation to a claim. This will have retrospective effect from 11pm on 31 December 2020 (the end of the Transitional Period).

The EU steel safeguarding measures will not apply when calculating the duty charged for RoW steel imports to Northern Ireland and movements of RoW steel from Great Britain to Northern Ireland which are not domestic goods, which are declared before the 3rd March 2021, where the goods would have benefitted from EU tariff-rate quota under EU steel safeguarding measures had those goods been imported into an EU member State and the goods would not have been subject to a UK steel safeguarding measure if they had been declared in Great Britain. Including provisions about claiming the treatment and requiring a notification in relation to a claim. This will have retrospective effect from 11pm on 31 December (the end of the Transitional Period) and will only apply to goods declared before the 3rd March 2021.

Summary of impacts

Exchequer impact (£m)

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

This measure is not expected to have an Exchequer impact.

Economic impact

This measure is not expected to have any significant economic impacts.

Impact on individuals, households and families

There is no impact on individuals as this measure only affects businesses. The measure is not expected to impact on family formation, stability or breakdown.

Equalities impacts

It is not anticipated that there will be impacts on groups sharing protected characteristics.

Impact on business including civil society organisations

This measure is expected to have a negligible impact on businesses. Businesses affected by the measure – who import steel which originates from countries outside the EU and the UK into Northern Ireland – will have access to the UK safeguard quotas or an equivalent in-quota tariff treatment provided there is a relevant EU tariff rate quota and it is open.

This means their steel imports will not be subject to the EU’s safeguard tariff where there is capacity in the relevant quotas.

One-off costs will include familiarisation with the change as affected businesses will need to understand whether they can access the solution and what they must do to benefit.

We anticipate these costs to be negligible.

Customer experience and continuing costs could include recording additional information per movement into Northern Ireland, and submitting this to HM Government in a timely manner.

We do not anticipate this to be a significant cost to businesses, as the information businesses need to provide is minimal and set out in an easy template.

HMRC has written to industry clearly setting out requirements for businesses to benefit from the solution. This measure is not expected to impact civil society organisations.

Operational impact (£m) (HMRC or other)

This measure is not expected to have a significant operational impact. The process will be captured within existing resource and there will be no new IT or digital requirements.

Traders using the process will use guidance published on GOV.UK to navigate the change.

Other impacts

This measure is not expected to have a significant operational impact. The process will be captured within existing resource and there will be no new IT or digital requirements.

Traders using the process will use guidance published on GOV.UK to navigate the change.

Monitoring and evaluation

The measure will be kept under review through communication with affected traders within the steel industry.

Further advice

If you have any questions about this change, contact: nistakeholderengagementteam@hmrc.gov.uk.