Please note that the following is all subject to agreement and so is an outline of the current proposed trading landscape for Northern Ireland.

The Windsor Framework, agreed on 27 February 2023, amending the Northern Ireland Protocol, has resulted in various VAT and excise duty changes, to the movement of goods between Great Britain and Northern Ireland. It is designed to restore the smooth flow of trade within the UK market since Brexit, whilst addressing various problems affecting the availability of goods from Great Britain, therefore being advantageous to manufacturers, processors and distributors.

Goods destined for the EU will remain subject to full checks, however, new data-sharing arrangements will be introduced, so that UK traders can move goods without tariffs, using standard commercial information and without physical checks, unless there is specific risk, through the ‘green lane’. The Stormont Brake will act as a democratic safeguard.

Implementation of the Framework will continue in stages through to 2025, allowing business time to adjust to the changes.

Goods movement

The Framework will establish a new UK internal trade scheme for the movement of goods, based on:

  • Use of ordinary commercial data
  • Commodity codes no longer being required
  • Goods automatically treated as internal UK movements for tariff purposes
  • No customs checks, unless intelligence-led operations underway
  • No further processes being involved once goods have moved

The Framework will increase the number of businesses classed as internal UK traders and move goods ‘not at risk’ of entering the EU through three changes:

  • UK businesses will be eligible, rather than having to be established in NI
  • The turnover threshold for businesses freely moving goods destined for NI is increased to £2m
  • Animal feed, healthcare, construction and not-for-profit businesses above the £2m threshold are still eligible

VAT and excise

The Framework ensures NI will benefit from the same VAT and alcohol taxes applying in the UK. Other changes include:

  • Reduced and zero rate limits removed in NI
  • Products consumed in NI are now eligible for full flexibility on rates meaning new categories that can be applied for VAT purposes
  • Exempting NI businesses from a range of EU rules, avoiding the need for many businesses to register for VAT under a 2025 EU Directive
  • Avoiding a range of administrative requirements on SMEs

Recent developments

The EU is continuing to put the Framework in place, with three regulations adopted in May 2023 relating to public, animal and plant health issues, medicines and certain steel products as follows:

  • New sanitary and phytosanitary rules under a new Retail Movement Scheme will make it possible to move agri-food retail products from GB to NI with minimal requirements, including inspection facilities and ‘Not for EU’ labelling to be introduced by 1 July 2025
  • The movement of certain plants and agricultural machinery will become easier and the ban on seed potatoes will be removed
  • All medicines will be available in NI at the same time as the UK and will be put on the market in accordance with UK rules
  • New safeguards, including UK only labelling, will ensure medicines do not enter the EU
  • Certain categories of steel will be able to transfer from GB to NI under the EU’s tariff rate quotas
  • NI companies will no longer need to pay the 25% tariff linked to the EU safeguard measures

In addition, from the end of June 2023 a reimbursement scheme was launched for EU duty paid on ‘at risk’ goods, which are then sold, or used, outside of the EU.

From January 2024, the Customs Duty Waiver Scheme will be extended so that the maximum value of duties able to be waived over the course of three tax years for ‘at risk’ goods moved into NI will increase to €275,000.

From September 2024, the full ‘green lane’ will be introduced for the movement of all goods between GB and NI, expanding the benefits of the UK Internal Market Scheme and removing the need for international customs requirements. The movement of parcels between GB and NI will also change, so that customs declarations are not required for deliveries to consumers.

For all new measures, existing grace periods will continue up until the point of new arrangements coming into force, to ensure smooth transition. The Trader Support Service will also continue as a free to use online tool.

Next steps

If you would like to find out more about how the Windsor Framework could impact your business, please contact Sean:

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