Moving and selling goods to Northern Ireland – what British businesses need to know

If your business is based in Great Britain (GB) and moves or sells goods into Northern Ireland (NI), there are many changes currently under way that you need to be aware of.

Implementation of the Windsor Framework is in full swing. Now is the opportune time for British businesses to ensure their goods can move freely without the imposition of EU duties.

If you are responsible for the submission of declarations to allow goods to enter NI, the following are key action points:

• Apply for the new UK Internal Market Scheme (UKIMS) authorisation – as soon as possible!
• Ensure your registrations and authorisations are up to date and valid
• Ensure customs agency rules are being followed
• Submit a Customs Duty Refund Claim if eligible

PKF Francis Clark can assist with all of the above and help your business to navigate these border process changes. Please do not hesitate to contact the customs team for assistance by emailing Customs.Advice@pkf-francisclark.co.uk.

Incoterms® – Have they been set?

Whenever goods move from GB to NI, it is vital to establish who is responsible for submitting supplementary declaration details to HM Revenue & Customs (HMRC) and payment of any customs liabilities that may arise. If no transaction is taking place, this will always be your businesses. If a sale is being made, this will be a commercial decision that must be agreed with the customer. It is highly recommended than an Incoterm® (International Chamber of Commerce Trade Term) is set to govern responsibilities during the transaction.

If your NI customer does not want to deal with any customs formalities, this will align with a DDP incoterm and the responsibility will be held by your business.

XI EORI Numbers – Are you entitled?

An Economic Operator’s Registration Identifier (EORI) number is listed on the customs declaration submitted to HMRC.

If, as a business based in GB, you do not hold an establishment (fixed address etc) in NI, you will need to ensure you have appointed an agent established in NI who can act for you on an “indirect” basis. For the time being, indirect agency can be provided free of charge by the Trader Support Service (TSS). If you hold an XI EORI without an establishment and have not appointed an indirect agent, you will need to correct your import process.

HMRC granted XI EORI numbers to a large number of GB businesses and is currently reviewing entitlement. If you cannot prove your reason to hold an XI EORI number when contacted by HMRC, you may find that your number is deleted.

Risk status – Do you know the risk?

The lack of a hard border on the island of Ireland means that goods entering NI from GB could enter the EU market without the payment of duties. To guard against this, HMRC give goods a risk status to indicate the chance of this happening.

If the goods are already nil duty (either in the EU Tariff or using rules in the UK-EU Free Trade Agreement), there is no risk.

If the goods are dutiable in the EU Tariff, they are at risk and the default position is that EU customs duty must be paid upon entry to NI. However, there are a range of ways that this duty can be waived, removed or refunded (see below).

UK Internal Market Scheme – Should you apply?

The UK Trader Scheme (UKTS) was set up to allow businesses to self-assess that goods introduced from overseas (including GB) will remain or be consumed within NI as part of the declaration process. This allows the risk to be removed, and with it the need to pay EU customs duty.

The existing UKTS authorisation is being replaced by a new UK Internal Market Scheme (UKIMS) on 30 September 2023. Any UK established business is now entitled to apply for UKIMS authorisation and current UKTS holders must hold UKIMS by the end of September to allow continuity.

The UKIMS application is extensive and requires the business to clearly demonstrate it understands the NI border process and has implemented internal procedures. If, as a GB business, you are responsible for the NI declaration and payment of liabilities and are importing dutiable goods, you will want to ensure that you have submitted an application as soon as possible.

From 30 September 2024, businesses with UKIMS status will be able to use a new Green Channel to move “not at risk” goods into Northern Ireland that will not be consumed within the EU. Border checks and the requirement to submit a supplementary customs declaration will be removed under the new process. Where goods are at risk of movement into the EU from NI, they must travel through the Red Channel and will be subject to the existing process.

New Customs Duty Waiver System – Are you registered?

Even if goods are at risk of movement, payment of EU duties can be waived if a claim is made for a waiver using EU de minimis state aid allowances.

From 1 January 2024, the de minimis state aid allowance is increasing from €200,000 (~£170,000) to €275,000 (~£235,000) over three years for most businesses. This will mean an increased entitlement under the Customs Duty Waiver Scheme.

On 3 July 2023, HMRC introduced a new digital waiver application process that ensures traders do not exceed their cumulative subsidy threshold and will be compliant with EU de-minimis State Aid regulations for Northern Ireland.

As part of the new process, there is no need to report customs state aid (customs duty waivers), because HMRC will already have this information. From 29 September 2023, it will become a legal requirement to be registered with the new service to continue to claim a customs duty waiver. If you have not registered by this date, any claims for the customs duty waiver will be rejected.

New Duty Refund Service – Can you submit a claim?

If your business has paid EU duty on the import of goods into Northern Ireland, you may be entitled to a refund. This can take place if you can prove that the goods are being used or consumed within NI and have not moved into the EU.

Historic claims can be made for any imports into NI since January 2021 and could offer substantial recoveries.

Click here to find out more about our VAT and customs experts, or for more information email Customs.Advice@pkf-francisclark.co.uk.