The Customs (Amendment) (EU Exit) Regulations 2020
Published 16 December 2020
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Who is likely to be affected
Energy suppliers moving oil, gas and electricity via pipelines or electrical cables, Eurotunnel passengers, travellers carrying goods in accompanied baggage and North Atlantic Treaty Organisation (NATO) military personnel.
General description of the measure
This measure introduces a number of targeted legislative changes that will allow customs procedures to continue to operate efficiently at the end of the transition period and will help facilitate the movement of goods between Great Britain and the European Union. This includes:
- increasing the threshold at which travellers are able to make an oral declaration or simple online declaration for commercial goods carried in baggage, making them easier to import
- amendments to the entry in a declarant’s records (EIDR) procedure to allow energy suppliers to use this facilitation without authorisation from HMRC to cover oil, gas and electricity movements via pipelines or cables
- a requirement for personal goods in accompanied baggage to be declared in advance of arriving at Eurotunnel terminals to help keep passengers flowing smoothly
- ensuring domestic regulations for the treatment of goods imported and exported by NATO military personnel align with the relevant conventions to which the UK is a signatory
Policy objective
The amendments will assist energy suppliers and travellers by making it easier for them to meet their customs obligations whilst ensuring that effective border controls continue after the transition period.
Background to the measure
The Border Operating Model published on 13 July and 8 October 2020 announced that the threshold for making oral and simple online declarations for commercial goods carried in accompanied luggage is increasing from £900 to £1500.
Detailed proposal
Operative date
The provisions will be brought into force using appointed day regulations.
Current law
Part 4, Chapter 2 of the Customs (Import Duty) (EU Exit) Regulations 2018 deals with circumstances where an individual may make a customs declaration orally or online in respect of chargeable goods and equivalent provisions for export declarations are in Part 4, Chapter 4 of the Customs (Export) (EU Exit) Regulations 2019.
Legislation for the simplified customs declaration process is in Part 4, Chapter 3 of the Customs (Import Duty) (EU Exit) Regulations 2018. This allows authorised persons to use the simplified customs declaration process and make a simplified customs declaration at the border and then a supplementary declaration, containing the remainder of the required information, by the 4th working day of the following month.
Proposed revisions
The instrument makes amendments to the Customs (Import Duty) (EU Exit) Regulations 2018 (the Import Duty Regulations) and the Customs (Export) (EU Exit) Regulations 2019 (the Export Regulations). Provisions in the Import Duty Regulations and the Export Regulations establish how a declaration can be made by travellers with goods in accompanied baggage and amendments are made to the value of such goods for which an oral or simplified online declaration may be used, increasing the threshold from £900 to £1500. The threshold increase is only for goods moved into and out of Great Britain and will not apply to goods moved into and out of Northern Ireland after the end of the transition period. This is because the Northern Ireland Protocol sets out that the Union Customs Code will apply in Northern Ireland and goods are bound by the €1000 threshold.
Changes are also made to the Import Duty Regulations to specify that personal goods in accompanied baggage that are intended to be carried on a Channel Tunnel shuttle train are required to be pre-lodged prior to import in Great Britain and an advanced declaration will need to be made by the traveller.
The instrument also makes amendments to the Import Duty Regulations and the Export Regulations to cover oil, gas and electricity (energy) movements via pipelines or electrical cables, known collectively as fixed transport installations (FTIs), after the transition period ends. It will allow traders to make customs declarations by making an entry into their commercial records (the EIDR procedure) without prior authorisation. Under this process a supplementary declaration will need to be submitted to HMRC systems by the 4th working day of the following month, but for FTIs, a change is made to allow the submission of a single aggregated supplementary declaration covering all energy movements over that period. For FTI movements from the European Union to Great Britain, the instrument clarifies that businesses may also utilise the transitional EIDR simplified customs declaration process available during the period 1 January 2021 to 30 June 2021. This enables eligible businesses to defer the submission of a supplementary declaration to HMRC for up to six months.
Further minor amendments are made to the Import Duty Regulations and the Export Regulations so that they align with the NATO Status of Forces Agreement (SOFA), to which the UK is a signatory. The NATO SOFA is a multilateral agreement between NATO member states that deals with the status of foreign forces while present on the territory of another state. The NATO agreement commits the UK to allowing eligible military goods to enter the UK without the collection of duty or other taxes. The NATO 302 procedure facilitates the despatch and return of military equipment of armed forces on manoeuvres. The instrument amends the Import Duty Regulations and the Export Regulations to ensure that the NATO 302 form (enabling duty free import/export into/out of NATO member countries) is recognised in domestic legislation. It corrects an oversight in the drafting of the Union Customs Code (UCC) that was reflected in domestic legislation and ensures that current procedures are 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 |
|---|---|---|---|---|---|
| nil | nil | nil | nil | nil | nil |
Once the UK transitions to its new relationship with the European Union, costings, where required, will be subject to scrutiny by the Office for Budget Responsibility and included in their forecasts at a future fiscal event.
Economic impact
The measure provides economic certainty to energy suppliers and supports a critical industry, ensuring that oil, gas and electricity movements continue to flow into the UK.
Impact on individuals, households and families
This measure will impact on individuals with personal (duty or tax free) goods in accompanied baggage. Increasing the threshold amount for which an oral or simple online declaration may be used will reduce the customs administrative burden on travellers and also reduce the potential need to acquire the services of a customs agent. Individuals travelling on Eurotunnel trains will need to make use of the HMRC online declaration service for passengers in advance of arriving into Great Britain. Where this is not possible because the individual needs digital assistance, a HMRC telephone declaration service has been set up to supplement the online declaration process. HMRC will provide guidance to help individuals in this.
This measure is not expected to impact on family formation, stability or breakdown.
This measure is expected to improve individuals experience of dealing with HMRC as making a customs declaration will be simpler.
Equalities impacts
Equality impacts have been considered and HMRC does not anticipate that there will be impacts on groups sharing protected characteristics. Where travellers are required to make advanced declarations prior to arrival at Eurotunnel terminals, HMRC’s online declaration service and HMRC’s telephone declaration service will ensure that all travellers, including those who are digitally excluded or need digital assistance, will be able to fulfil their customs obligations.
Impact on business including civil society organisations
It is anticipated that this measure will provide impacted businesses with easements, which will be explored in due course when more detail emerges. The measure adjusts the UK customs framework so that energy suppliers are able to use the EIDR procedure without prior authorisation from HMRC and also allows them to submit a single supplementary declaration each month. There are currently 34 suppliers importing energy via FTIs, of which 26 also import from countries outside the European Union and are familiar with customs obligations. This measure will help to minimise the administrative burden, particularly for suppliers new to customs procedures, and it will ensure that oil, gas and electricity movements continue to flow smoothly into the UK. Suppliers moving energy from the European Union into Great Britain may also choose to adopt the transitional EIDR simplified customs declaration process available during the period 1 January 2021 to 30 June 2021, but this is a matter of timing and should not materially affect the total number of declarations submitted to HMRC. Businesses may incur negligible one-off costs which are likely to include familiarisation with the new rules that cover record keeping requirements and data retention to make a supplementary declaration. This measure is expected to improve businesses experience of dealing with HMRC as the EIDR procedure will become more accessible and submitting supplementary customs declarations will be simpler. There are not expected to be any continuing costs.
This measure is not expected to impact on civil society organisations.
Operational impact (£m) (HMRC or other)
This will help reduce the number of full customs declarations submitted to HMRC. Resources will be required to support compliance. This resource will mostly take the form of HMRC staff being re-directed from other work.
Other impacts
Other impacts have been considered and none have 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 Neil Vosper in the Customs Legislation team by email: neil.vosper@hmrc.gov.uk.
Declaration
The Rt Hon Jesse Norman 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.