If the goods moving from GB to NI are of GB origin, in line with the Rules of Origin outlined in the TCA then no customs tariffs will be applied;
Trade & Cooperation Agreement – Availing of 0% Tariffs
The EU-UK Trade and Cooperation Agreement (TCA), which was agreed on 24th December 2020, provides for zero tariffs and zero quotas on all trade in goods which originate in the EU or the UK. What this means is that goods which have UK origin and which are sold to the EU to include NI, can claim preferential tariffs on their customs declaration, meaning that no customs duties apply.
Equally goods of EU origin can be imported to GB using the preferential status within the TCA.
Rules of Origin
To avail of the preferential tariffs (0%) on trade in goods between the EU and GB, businesses in NI, who procure goods from GB, will need to determine if the goods they are purchasing would be deemed to originate in the UK. Similarly, businesses will need to determine if the finished products which they are selling could be deemed to originate in NI.
Under the Trade and Cooperation Agreement (TCA), a product will be considered “originating” if:
- It is “wholly obtained” in the UK;
- It is produced in the UK exclusively from UK/EU originating materials, or;
- It has been substantially transformed in line with the relevant Product-Specific Rule included in the TCA.
These product-specific origin rules (PSRs) can require a specific process to be carried out on non-originating materials in the UK, impose a maximum threshold on non-originating materials used, require that the resulting product falls under a different tariff (sub)heading or Chapter, or be a combination of these rules.
All PSRs are included in the Trade and Cooperation Agreement (see Annex 2)
Businesses are to be aware that goods of EU origin which are in free circulation in GB and whose origin is not altered, on movement from GB to NI/EU, preferential tariff rates cannot be claimed under the TCA and thus tariffs may be applicable.
Businesses in the Tourism & Hospitality sector therefore need to be mindful when purchasing goods, and how important it is to firstly understand the commodity code of the good – that is to confirm what tariffs apply and then if tariffs apply, what is the origin of the good.
If your GB supplier tells you the goods are of GB origin, note as the importer it will be your responsibility that you hold proof that the goods meet the rules of origin.
Claiming Preferential Tariffs under TCA
From 1 January 2021, in order to claim preferential tariffs when moving goods between GB and NI, businesses’ need to claim preference on the company’s customs declaration and declare they hold proof that the goods meet the rules of origin. Importers must have proof of the originating status of the product before claiming preference, in the form of either:
a) Statement of Origin provided by the exporter on a commercial invoice or other commercial document that describes the goods;
b) Supporting documents and records if you are claiming preference using your “importers knowledge.”
These records should be retained for at least 4 years.
For UK-EU trade, until 31 December 2021, supplier declarations are not required when goods are exported. However, businesses may be retrospectively asked to provide a supplier’s declaration after this date. Where the applicable EU tariffs are higher than zero, NI based companies importing goods from GB need to consider whether they are entitled to avail of zero tariffs under one of the following:
Trade and Cooperation Agreement
UK Trader Scheme (UKTS)
If the goods you are importing from GB to NI attract a tariff, and on the assumption you can’t avail of the Preferential tariffs under the TCA, the UK Trader Scheme (UKTS) could potentially be used to eliminate additional tariffs being applied on the movement.
Full guidance on the scheme is available here.
This scheme can be used to declare that the goods you are importing from GB to NI are not at risk of entering the EU.
If you are authorised to use, you can use this scheme to self-declare that your goods are for sale to, or final use by end consumers located in the UK.
Or if the goods you move into Northern Ireland will be processed, you can avail of the scheme if you:
- Can prove that your turnover for the most recent financial year is below £500,000;
- Can declare that you intend to bring goods for processing into Northern Ireland for a number of sole purposes to include:
o Food for sale to end consumers in the UK
If you can’t avail of the Preferential Tariffs under the TCA or the UKTS, the UK Government have rolled out a waiver scheme.
Traders can claim a waiver for duty on goods you bring into Northern Ireland from Great Britain which might otherwise incur ‘at risk’ tariffs if you have not exceeded the relevant allowances at the point your import declaration is submitted.
Waivers for duty on goods that would otherwise incur ‘at risk’ tariffs are provided in the form of ‘de minimis aid’ and most businesses can claim up to a maximum of €200k of aid, on a rolling basis, over 3 tax years (this threshold includes “de minimis” aid unrelated to customs duties). It is important to note that HMRC guidance currently indicates that traders cannot claim a waiver where they are importing any goods classed as primary agricultural goods. Primary agricultural goods have not been defined by HMRC as of yet (they have indicated that further guidance will follow as soon as possible. The ability to claim waivers appears to be designed primarily for businesses who only do ad hoc trading with GB suppliers or small businesses.
If you are eligible to claim a waiver you must do this at the point your import declaration is submitted.
If none of the above conditions are satisfied, goods will be subject to EU tariffs on their movement from GB to NI.
It has been indicated that post January 2021, if you are a UK-based company (with no offices, branches or other establishments in the EEA) which regularly processes or controls personal data and you continue to offer goods or services to clients in the EEA or monitor the behaviour of individuals in the EEA, you may be required to appoint an EU based representative. There may also be a requirement to take additional safeguards by inserting standard clauses into your terms of business/ privacy notice.
However, whilst data adequacy is not included in the TCA, a joint declaration published alongside the deal makes it clear the EU will undertake an adequacy assessment. Until that decision is made, a temporary arrangement to allow data to continue being transferred from the EU to the UK from 1 January 2021 has been agreed. This period will last for 4 months and can be extended to 6 as long as the UK makes no changes to its own data protection laws. This means businesses transferring data between the EU and the UK will not need to put in place alternative measures such as standard contractual clauses from 1 January. We would advise all businesses to adopt a wait and see approach in this regard.
Licenses, certifications and authorisations
To continue to place goods, subject to licenses, certifications or authorisations, on both the EU and UK markets, businesses are being advised to ensure their goods remain eligible.
UK certified products are no longer eligible for sale in NI or the EU since 31 December 2020. Where products are certified by bodies established in NI, such products will be eligible for sale in NI but not in the EU. Where an NI certifier is used, the marking UK(NI) will need to be used on all product labelling and where a UK certifier is used, the UKCA mark will need to be used to differentiate products from those which are CE certified.
If the company are currently reliant on EU certifications in order to provide goods or services and such certification is currently provided by a UK based company, to continue to sell goods or services in the Irish/ EU markets, businesses will either have to:
- Transfer your files from your UK Notified Body to an EU-27 Notified Body
- Obtain a new certificate which has been issued by an EU-27 Notified Body
Certificates issued by EU-recognised Notified Bodies will continue to be valid for the Great Britain market until 1 January 2022.
Under the Common Travel Area (CTA) Irish and British citizens will continue to be able to move freely and reside in either jurisdiction and enjoy associated rights and entitlements including access to employment, healthcare, education and social benefits etc.
EU citizens who are not Irish, and who started living in GB/NI prior to 31 December 2020 need to apply to the EU Settlement Scheme on or before 30 June 2021 to protect their rights to remain.
Post 31 December 2020, EU citizens who are not Irish, who live in RoI and work in Northern Ireland will need to apply to the UK’s Frontier Worker Permit Scheme in order to continue working in Northern Ireland after 31 December 2020. For more information click here.
From 1 January 2021, non-British, non Irish workers who wish to begin employment in the UK (including NI) while remaining outside the UK will need to apply through the UK’s pointsbased immigration system.