Commodity codes when claiming Transfer of residence relief
Published 12 July 2022
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Who is likely to be affected
This measure will affect individuals who are planning to move their primary residence into the United Kingdom (UK); and third parties associated with this process, such as removal firms, who make customs declaration on behalf of people moving their primary residence to the UK.
General description of the measure
When an individual moves their primary residence to the UK, they can claim Transfer of Residence relief (ToR). If a written customs declaration is required when claiming ToR, e.g. if the goods are moved by a third party such as a removal firm, the declarant must provide individual commodity codes to classify each of the personal effects. For example, if a person is moving 35 different household items, they would need to provide up to 35 different commodity codes.
This measure will remove the need to provide commodity codes for each item when ToR is claimed and mean that individuals using this relief (and third parties making customs declarations on their behalf) will be able to declare all their personal effects (except for Excise goods and prohibited or restricted items) under a single commodity code when moving their primary residence to the UK.
Policy objective
This measure is in line with HMRC’s aim to simplify and improve tax administration for individuals and businesses. The introduction of a single commodity code will reduce the administrative burden for individuals who move their primary residence to the UK and claim ToR.
Background to the measure
This measure is the consequence of feedback and engagement with a range of industry stakeholders, including removal firms and their representative organisations.
The feedback demonstrated that the requirement to find and submit individual commodity codes for each item when moving a household’s personal effects to the UK is a significant administrative burden. Stakeholders indicated that they would welcome the use of a single commodity code for goods moved under ToR. The government has listened to the feedback and is taking action to make the process simpler.
Detailed proposal
Operative date
The measure will take effect from 1 August 2022.
Current law
The Taxation (Cross-border) Trade Act 2018 (‘TCTA’) requires HM Treasury to make regulations establishing and maintaining a system for classifying goods that arrive in the UK by applying a classification code enabling the correct amount of import duty to be charged. The TCTA gives HM Treasury a power to make regulations for full or partial relief from a liability to import duty, and to create a system of customs tariffs.
Reliefs
The ‘United Kingdom Customs Tariff: Reliefs from Import Duty’ document (‘the UK Reliefs Document’) sets out the eligibility criteria, and conditions, under which claims for relief, including Transfer of Residence relief which this instrument relates can be granted.
This document is given effect by the Customs (Relief from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020, which in turn is given effect by the TCTA.
Tariffs
The ‘Tariff of the United Kingdom’ document (‘The Tariffs of the UK’) outlines the system for classification of goods per commodity code.
This document is given effect by the Customs Tariff (Establishment) (EU Exit) Regulations 2020, which in turn is given effect by the TCTA.
Proposed revisions
This instrument is in exercise of the powers conferred by sections 8 and 9 of the TCTA to make regulations in relation to full or partial relief from a liability to import duty, and to create and maintain a system of customs tariffs respectively. It will be laid on 11 July 2022, with effect from 1 August 2022.
This instrument amends regulation 2(1) of the Customs (Relief from a Liability to Import Duty and Miscellaneous Amendments) (EU Exit) Regulations 2020 by amending the definition of the UK Reliefs document to give legal effect to an updated UK reliefs document. This update to the reliefs document will introduce the eligibility criteria and conditions under which an individual can claim ToR relief using the single commodity code.
This instrument will also amend regulation 1(2) of the Customs Tariff (Establishment) (EU Exit) Regulations 2020 by amending the definition of the United Kingdom tariffs document to give legal effect to an updated Tariff of the United Kingdom document. This update to the Tariff will introduce a new chapter, Chapter 99, into this document, which contains a new single commodity code to be used for the ToR relief.
Summary of impacts
Exchequer impact (£m)
| 2022 to 2023 | 2023 to 2024 | 2024 to 2025 | 2025 to 2026 | 2026 to 2027 | 2027 to 2028 |
|---|---|---|---|---|---|
| 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
This measure will have a positive impact on individuals who claim ToR relief when moving their primary residence into the UK, or for the purposes of marriage or study. These individuals will now be able to declare all items under a single commodity code, reducing administrative burden. This measure is not expected to impact on family formation, stability, or breakdown.
Equalities impacts
It is not anticipated that there will be impacts for those in groups sharing protected characteristics.
Impact on business including civil society organisations
This measure will impact on businesses who make customs declarations on behalf of individuals who claim ToR relief when moving their primary residence into the UK. One-off costs include familiarisation with the new requirement to declare all items under a single commodity code. There are not expected to be any continuing costs.
Overall, the measure is expected to improve business’ experience of dealing with HMRC as the process for claiming ToR will be simpler.
This measure is not expected to impact on civil society organisations.
Operational impact (£m) (HMRC or other)
There will be minor operational impacts on HMRC, including minor changes to both online (Gov.uk) guidance and the authorisation letters issued to those claimants who are required to have their ToR claim approved in advance.
The cost of HMRC’s operational activity in support of this policy will be met from existing resource.
Other impacts
Other impacts have been considered and none have been identified.
Monitoring and evaluation
This measure will be kept under review through communication and ongoing stakeholder engagement with relevant trade associations.
Further advice
If you have any questions about this change, please contact Revati Bhand on telephone: 03000 591092 or email: revati.bhand@hmrc.gov.uk.
Declaration
Rt Hon Lucy Frazer, QC 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.