Policy paper

The Excise Duties (Northern Ireland) (Miscellaneous Modifications and Amendments) (EU Exit) (Amendment) — Regulations 2024

Published 10 September 2024

Who is likely to be affected

Businesses that move excise goods (alcohol, tobacco, and energy products) between the European Union (EU) and Northern Ireland.

General description of the measure

This measure makes some minor amendments to correct changes made to existing legislation, which came into force on 13 February 2023. This legislation makes technical fixes to the statute book to better implement the EU excise provisions applicable in Northern Ireland under the Windsor Framework of the EU Withdrawal Agreement.

Policy objective

The objective of this measure is to improve the excise legislation applicable in Northern Ireland in line with our commitments under the Windsor Framework.

Background to the measure

Under the Windsor Framework, some EU legislation applies in relation to the movements of excise goods within, into and out of Northern Ireland. This helps to ensure frictionless trade on the island of Ireland and supports business. Some minor corrections and clarifications are needed to ensure that the legislation applicable in Northern Ireland in line with the Windsor Framework is clear and consistent.

There has been no formal consultation on these changes. HMRC have a regular engagement with external stakeholders in the Joint Excise Consultation Group (JECG) which has been notified of the changes that are being made.

Detailed proposal

Operative date

These measures will come in force from 1 October 2024.

Current law

The Excise Goods (Holding, Movement and Duty Point) Regulations 2010 (HMDP) set out the general arrangements for the holding and movement of excise goods for the UK.

To implement the Windsor Framework, the application of HMDP in relation to Northern Ireland was preserved as it was worded immediately before the end of the Brexit transition period, and then modified by Part 1 of the Excise Duties (Northern Ireland Miscellaneous Modifications and Amendments) (EU Exit) Regulations 2020 (NIMMA).

The current provisions concerning the holding and movement of excise goods within the EU are set out in Council Directive (EU) 2020/262 (the 2020 Directive) and related directly applicable EU legislation. The directive is to be implemented in Northern Ireland in line with the Windsor Framework and was legislated for in Northern Ireland by The Excise Duties and Value Added Tax (Northern Ireland) (Miscellaneous Modifications and Amendments) Regulations 2023 (SI 2023/64) (the 2023 Regulations).

Proposed revisions

Minor amendments are being made to NIMMA to correct and clarify the application of the 2020 directive in Northern Ireland. These amendments correct errors in the 2023 regulations and ensure that the legislation correctly reflects the policy intent and the systems and processes which already apply the 2020 directive.

The changes clarify, for example, HMRC’s obligations in relation to exports of excise duty suspended goods and reporting of that in the Excise Movement and Control System. The rules concerning accounting for distance sales (business to consumer) of excise goods into Northern Ireland from the EU are also amended to align with the 2020 directive. EU consignors will no longer be required to account for excise duty on these sales through a Northern Ireland tax representative. Instead, the legislation will make clear that the obligations fall on the EU consignors unless they choose to appoint a Northern Ireland tax representative.

Other minor errors in the changes made by the 2023 regulations are also being rectified, including an incorrect cross-reference to other legislative provisions, and some drafting issues drawn to our attention by the House of Commons Select Committee on Statutory Instruments.  

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

These measures are not expected to have an exchequer impact.

Economic impact

These measures are not expected to have any significant macroeconomic impacts.

Impact on individuals, households, and families

There is expected to be no impact on individuals as the measures affect only businesses.

Equalities impacts

It is not anticipated that there will be impact on those in groups sharing protected characteristics.  

Impact on business including civil society organisations

The measure is expected to have negligible impact on businesses as mostly the systems and processes already reflect the position in EU law. There is a potential impact on tax representatives accounting for UK excise duty in relation to sales from EU businesses direct to private individuals in Northern Ireland. There is only one such tax representative operating in Northern Ireland and it is likely that EU businesses will continue to use their services in the short term at least.

One-off costs could include familiarisation with these changes to Northern Ireland tax representatives if the EU businesses they are representing choose to meet the obligations themselves directly (meaning not through a tax representative). HMRC will contact the registered Northern Ireland tax representative accounting for excise duty on distance sales to ensure that the changes are understood. There are not expected to be any further one-off or continuing costs.

This measure is expected overall to have no impact on business’ experience of dealing with HMRC as the changes are mostly to the wording of the legislation with processes and systems interactions remaining unchanged. The change to distance selling gives EU consignors a new option of fulfilling the tax obligations themselves rather than appointing a tax representative.

There is expected to be no impact on civil society organisations.

Operational impact (£ million) (HMRC or other)

This measure is not expected to have an operational impact upon HMRC or other government departments.

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 Prerna Sharma at Prerna.Sharma@hmrc.gov.uk

Declaration

James Murray MP, Exchequer 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.