Policy paper

The Customs (Aerodromes and Miscellaneous Amendments) Regulations 2023 — changes to customs rules

Published 13 November 2023

Who is likely to be affected

Businesses, organisations and individuals who import and export goods and organisations involved in work to relieve the impact of disasters.

General description of the measure

This measure makes changes to the customs rules which apply in certain circumstances when goods are imported or exported. It includes:

• clarification on the customs position of stores (goods held on a ship, aircraft or railway vehicle) during the course of an international journey
• changes to rules for customs duty relief where goods are imported to alleviate the impact of a disaster (disaster relief)
• conditions to be met by the person in control of an aerodrome (approval conditions) and penalties for both breaches of approval conditions and customs rules relating to the control of movement of aircraft
• other minor or technical updates to the customs rules, including changes to allow HMRC to repay customs duty following a review under the government’s trade remedies legislation

The provisions in this measure apply to movements into or out of Great Britain (GB) and movements into or out of Northern Ireland (NI) to the extent their application is in accordance with provisions of the Windsor Framework.

Policy objective

The changes in this measure will clarify rules and correct some anomalies in the customs regime and provide the government with flexibility to react to certain circumstances. Additionally, the measure will establish appropriate controls supporting the aerodrome approval process and allow for repayment of customs duty in certain cases which are found, on review, to no longer be due.

Background to the measure

HMRC informally consulted relevant stakeholders on the changes to the customs treatment of stores. 

Finance Act 2023 established a new approval regime for aerodromes. HMRC and HM Treasury published a consultation on the draft legislation of Finance Bill 2023 in July 2022 which closed in September 2022.

The other changes have not been subject to any formal or informal consultation as they are small technical changes.

Detailed proposal

Operative date

The measure will have effect from 4 December 2023.

Current law

Most rules in relation to customs duty are set out in the Taxation (Cross-border Trade) Act 2018 (TCTA) and regulations made under this Act. These regulations include the Customs (Import Duty) (EU Exit) Regulations 2018 (SI 2018/1248) (the import duty regulations) which include rules around pre-lodgement of customs declarations, when goods are imported, the presentation of imported goods (including stores on board a ship, aircraft or railway vehicle) and the repayment by HMRC of customs duty amounts. In addition, the Customs (Export) (EU Exit) Regulations 2019 (SI 2019/108) (the export regulations) set out rules that apply when goods are exported from the UK.

Regulations made under the TCTA also include the Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020 (SI2020/1431). These regulations provide for details concerning when a relief from customs duty may apply, who may claim relief and eligibility rules for duty reliefs set out in the document United Kingdom Customs Tariff: Reliefs from Import Duty (UK Reliefs Document). This document provides that a relief may apply, subject to certain conditions, when certain goods are imported to the UK to alleviate the impact of disasters.

Part 3 of the Customs and Excise Management Act 1979 (CEMA) governs the approval of areas for customs and excise purposes, including aerodromes.

The Customs (Contravention of a Relevant Rule) Regulations 2003 (SI 2002/3113) which are made under the Finance Act 2003 impose civil penalties for contraventions of specified provisions of customs legislation.

Proposed revisions

The Customs (Contravention of a Relevant Rule) Regulations 2003 will be updated to:

• provide for civil penalties to be applicable where there is a breach of specified conditions or where the person in control of an unregulated aerodrome does not take reasonable steps to prevent a breach of the rules

• provide for a civil penalty for those who breach the regulations in respect of stores

The Customs (Import Duty) (EU Exit) Regulations 2018 (SI 2018/1248) will be amended to:

• provide for a pre-lodged declaration to be treated as withdrawn if the goods are not presented to Customs within a permitted period specified in law
• enable repayment of import duty that has been charged under trade remedies legislation (relating to the dumping or subsidisation of imported goods) where required as a result of a review by the Trade Remedies Authority
• allow stores on board ships, aircraft and railway vehicles to be consumed, used or sold as retail on international journeys to and from the UK within the UK customs territory
• introduce additional cases in which customs declarations relating to stores can be made by conduct when unloaded from a vessel following a journey
• create an exception to the requirement to present certain stores to Customs on import where they are unloaded from a vehicle following an international journey and subsequently re-loaded onto that vehicle, or another vehicle within the fleet, as soon as is practicable

The Customs (Export) (EU Exit) Regulations 2019 (SI 2019/108) will be amended to deem export requirements to be satisfied where stores are loaded from a customs warehouse or have been refurbished inland, and expand the categories of goods which are not required to be exported in accordance with the applicable export provisions.

The Customs (Reliefs from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020 (SI 2020/1431) will be amended to:

• give legal force to a new version of the United Kingdom Customs Tariff: Reliefs from Import Duty document — this will allow a wider range of organisations providing services relating to disaster relief to qualify for the relief, as well as allow goods donated to charity to qualify
• enable the scope of goods eligible for disaster relief, the time limit for the duration of the relief and the time by which claimants must deliver goods to disaster victims to be specified by public notice

The measure also sets out approval conditions to be met by the person in control of an aerodrome.

Summary of impacts

Exchequer impact (£ million)

2023 to 2024	2024 to 2025	2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029
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 impact.

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 those in groups sharing protected characteristics.

Impact on business including civil society organisations

Most of the changes in this measure are either minor or technical changes. The changes to the customs treatment of stores are intended to provide additional clarity to industry operators and facilitate the movement and replenishment of stores and supplies used onboard international journeys. One-off costs for those businesses could include familiarisation with any changes and obtaining relevant authorisations to store and clean goods away from the port. There are not expected to be any continuing costs.

The measure also corrects an unintended legislative defect in the law to ensure all pre-lodged customs declarations are treated as withdrawn if the goods are not presented to customs within a specified time. This change will regularise existing industry and HMRC system processes and is therefore not expected to have any continuing costs.

There will be a minimal burden for those businesses who reclaim duties using the trade remedies changes as they will have to submit relevant paperwork to reclaim the monies.

This measure will have a negligible impact on those businesses who import and export goods and those businesses that are providers of disaster relief. There will be one-off costs with familiarisation of these changes. There are not expected to be any continuing costs.

The aerodromes changes will affect aerodromes that are currently operating under a Certificate of Agreement or that which will require approval. All aerodromes will be subject to penalties for non-compliance with approval conditions or legal obligations. Other impacts could include a one-off cost of familiarisation with the changes. Continuing costs could include the need to reapply for approval approximately every 5 years. There are not expected to be any further one-off or continuing costs.

The disaster relief changes will affect public services, providers of these services, charities, and traders who claim relief on goods imported on behalf of any of these organisations. The changes will make more providers of public services eligible to claim relief and give greater clarity on conditions for claiming. Charities involved in disaster relief in the UK will benefit because goods donated to them by third parties will become eligible for relief. One-off costs for those businesses and civil society organisations could include familiarisation with any changes. There are not expected to be any continuing costs. It is not possible to quantify the scale of impacts because the relief is only activated by government for temporary periods in response to specific disasters, the scope of goods eligible for the relief is determined by them at that time and the scale of use of the relief will depend on the scale and duration of the relevant disaster.

For most businesses and civil society organisations there will be no change in their experience of dealing with HMRC following the introduction of these changes, as they do not significantly alter how compliant businesses interact with HMRC. A very small number of businesses may see an improvement in their experience of dealing with HMRC as a result of the changes relating to trade remedies. This is because they may receive a refund of duty.

Operational impact (£ million) (HMRC or other)

It is not anticipated that implementing these changes will incur any additional costs or savings for HMRC. Some guidance will need to be updated.

The extent of the operational delivery impacts if and when the disaster relief provision is activated will depend on the range of goods and organisations the government decide to include in scope when they activate the relief, and the scale and duration of the disaster itself. HMRC expect that the cost of HMRC’s operational activity to deliver this policy will generally be met from existing resource, although the actual impact will depend on the scale of the disaster and the associated response. Any impacts will therefore be considered and dealt with at the time of the relevant disaster and the UK response.

Other impacts

Other impacts have been considered and none have been identified.

Monitoring and evaluation

The provisions in this 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 cpsbriefingandco-ordinationteam@hmrc.gov.uk.

Declaration

Victoria Atkins 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.