Policy paper

Customs (Miscellaneous Amendments) Regulations 2023

Published 23 May 2023

Who is likely to be affected

Businesses, organisations and individuals who import and export goods into and out of the United Kingdom (UK).

General description of the measure

This measure makes a number of different changes to the customs rules which apply in certain circumstances, when goods are imported or exported. It includes changes to simplify declaration requirements that apply for certain imported or exported goods, including the Simplified Customs Declaration Process (SCDP), as well as changes that will make sure HMRC has sufficient information for effective control and supervision of imported and exported goods.

The measure also includes other minor or technical updates to the customs rules, that apply for imported and exported goods, including where changes are required under the UK’s international agreements on transit of goods.

The measure also provides for the continuation of the customs easement for exports of humanitarian aid to Ukraine.

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

Policy objective

Many changes in this instrument are intended to simplify and clarify customs requirements and facilitate the movement of goods into and out of the UK, supporting businesses. Some formalise temporary easements which are currently in place and others are in response to stakeholder feedback.

The removal of the time limit for the cessation of the customs easement for exports of humanitarian aid to Ukraine will continue to support the people of Ukraine and allow significantly simplified customs formalities when exporting aid, continuing to make sure aid can reach those that need it quickly.

Other changes in the measure improve the government’s ability to identify whether businesses have complied with customs requirements in order to make sure a level playing field and a fairer customs regime for all.

Background to the measure

HMRC and HMT published a ‘Call for Evidence: An Independent Customs Regime’ in February 2022, which gathered views on the SCDP. A response was published on 25 July 2022 and the resulting changes were announced at Spring Budget 2023.

In response to the humanitarian crisis in Ukraine the government introduced a temporary customs easement in March 2022 to make it easier to move humanitarian aid to support the people of Ukraine. This was extended in May 2022 and the sunset provision is now being removed.

On the other changes in this measure HMRC has informally consulted with relevant stakeholders.

Detailed proposal

Operative date

The measure will have effect from 13 June 2023, with the exception of:

• regulations 2(3)(a), (b) and (g) and (4), (11), (12), regulations 3 (4)(a), (5), (7)(a) and (8) and regulation 6(3) which will have effect on 1 December 2023
• regulation 4 which will have effect on 30 November 2023

Current law

Most of the current customs provisions are contained within the Customs (Import Duty) (EU Exit) Regulations 2018 (SI 2018/1248) (the import duty regulations) and the Customs (Export) (EU Exit) Regulations 2019 (SI 2019/108) (the export regulations) both of which are made under the Taxation (Cross-border Trade) Act 2018 (TCTA).

The import duty regulations contain the existing provisions for the SCDP in Chapter 3 of Part 4 and the provisions concerning the related approvals for using the procedure in regulation 91, the payment of import duty in regulation 43, the Ukraine customs easement provisions in regulation 14, the notification and presentation of goods provisions in regulation 4, and the provisions concerning Merchandise in Baggage (MiB) in regulations 4, 18, 39A, 39B, 39C.

The export regulations contain provisions for the SCDP in regulation 32 and 38A, the Ukraine customs easement provisions in regulations 15 to 24, and the MiB provisions in regulations 17A, 21A, 51 and 51A.

The Customs Transit Procedures (EU Exit) Regulations 2018 (SI 2018/1258) which are made under the TCTA set out requirements for various internationally agreed transit arrangements including the common transit procedure (see schedule 1, which implements the requirements of the Convention on a common transit procedure (Common Transit Convention)) and the Transports Internationaux Routiers (TIR) transit procedure (see schedule 2, which implements the requirements of the Customs Convention on the International Transport of Goods subject to cover of TIR Carnets (TIR Convention)).

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 import duty regulations will be amended to:

• allow HMRC to set out deadlines for submitting import declarations using the SCDP and due dates for the payment of import duties in a public notice
• make provision for HMRC to amend and update the standard conditions of an authorisation for existing approvals, to avoid differences between new and existing approvals
• allow most goods arriving from the UK Continental Shelf (UKCS) to be declared by conduct — in these circumstances, eligible goods moving between the UKCS and Great Britain could be declared by the conduct of provision of unloading goods from a vessel arriving from the UKCS and the provision of information as set out in a public notice
• make sure that the presentation requirement which applies for goods is only satisfied in specified cases once HMRC has been notified of the arrival of the goods
• restrict, for MiB imports, the movement of high-risk goods, or by high-risk traders to specific ports — in addition, to allow HMRC to set out the monetary threshold which allows simpler customs declarations for MiB imports in a public notice

The export regulations will be amended to:

• allow HMRC to set out deadlines for submitting export supplementary declarations in a public notice
• continue the customs easement to make it easier to move aid and donations out of the UK to support the people of Ukraine
• allow most goods moving between Great Britain and the UKCS to move using a declaration by conduct — authorised traders moving eligible goods between Great Britain and the UKCS can declare those goods by the conduct of loading goods onto a vessel destined for the UKCS and the provision of information as set out in a public notice
• restrict, for MiB exports, the movement of high-risk goods, or by high-risk traders to specific ports — in addition, to allow HMRC to set out the monetary threshold which allows simpler customs declarations for MiB exports, in a public notice

The Customs Transit Procedures (EU Exit) Regulations 2018 will be amended to:

• remove the mandatory requirement to print and present a paper transit declaration to customs authorities at the start of and during a transit movement and make provision of the Movement Reference Number (MRN) by electronic means the standard position — this reflects amendments to the Common Transit Convention as a result of system changes being completed through phase 5 of the New Computerised Transit System (NCTS) which all parties need to adopt
• accommodate changes which were made to the TIR Convention in 2021 — an amendment was made to the TIR Convention that increases the number of customs offices of departure and destination that a TIR movement can include — these are the places of exit and entry to each customs territory the goods move through — the change will allow a movement to go through 8 customs offices of departure and destination

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

• provide discretionary penalties for breaches relating to the new UKCS declaration provisions
• make consequential amendments following the changes in this measure to allow HMRC to specify deadlines for SCDP and export supplementary declarations in public notices
• provide discretionary penalties for failing to provide a notification that goods have arrived where that has not happened automatically and failing to import or export high risk MiB movements at specified ports

Summary of impacts

Exchequer impact (£ million)

2023 to 2024	2024 to 2025	2025 to 2026	2026 to 2027	2027 to 2028	2028 to 2029
empty	empty	empty	empty	empty	empty

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

This measure is not expected to have any significant economic impact.

Impact on individuals, households and families

This measure is expected to have a very limited impact on individuals as the measure applies mainly to businesses. However, the continuation of the customs easement for exports of humanitarian aid to Ukraine will impact any individual who directly exports humanitarian aid to Ukraine, who will be able to continue to use the easement.

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

Once implemented the SCDP and Transit changes may reduce the administrative burden for those businesses who use the processes. The UKCS changes simplify the procedures for those moving goods to and from the UKCS.

There may be one-off costs which include familiarisation with the changes and could include the upgrading of IT systems. The arrival (notification and presentation of goods) and the MiB changes are not expected to significantly impact businesses as traders are already following a manual process of notification to make sure that HMRC is aware that their goods have physically arrived. One-off costs could include familiarisation with the arrivals process as well as guidance pages. There will be additional impacts on those non-compliant businesses as penalties will be imposed on those who fail to comply. For MiB movements, the requirement to use certain ports for high-risk movements might mean increased travel costs for some traders.

Overall, the measure is expected to improve businesses experience of dealing with HMRC, as once implemented many of the changes provide more flexibility, simpler processes and reduce burdens for some businesses.

The measure is not expected to impact civil society organisations, although organisations who export humanitarian aid to Ukraine will be able to continue to use existing easement.

Operational impact (£ million) (HMRC or other)

Some of the changes will have some operational and delivery impacts for HMRC and some system changes will be required. Guidance will also need to be updated.

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 these changes, contact: [email protected].

Declaration

The Financial Secretary to the Treasury, Victoria Atkins MP, 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.