A Guide to Trading in Northern Ireland, and the Windsor Framework

In this article we look at how the Windsor Framework amends the Northern Ireland Protocol and provides a new set of arrangements for the trading of goods from Great Britain to Northern Ireland.

Contents

Introduction
Windsor Framework - A timeline
What are the Green Lanes?
What are Red Lanes?
What does declaring goods "At Risk" mean?
Can I Still Use the Trader Support Service?
What is the "Stormont Brake"?
What does the Windsor Framework mean for parcel movements from GB to NI?
What does the Windsor Framework change for VAT and excise?
UK Internal Market Scheme
Duty reimbursement scheme
Will I still be able to avail of the Customs Duty Waiver Scheme?
Sanitary and Phytosanitary
Further information

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Introduction

On 27 February 2023, the UK and the EU announced a new "Windsor Framework" which amends the existing Northern Ireland Protocol. The Windsor Framework includes changes to the trading of goods from Great Britain (GB) to Northern Ireland (NI), amendments to VAT rules, arrangements for the movement of parcels, and new governance mechanisms.

The Windsor Framework Agreement sets out to restore the smooth flow of trade within the UK internal market; safeguard Northern Ireland’s place in the Union; and address the democratic deficit that was otherwise at the heart of the original Northern Ireland Protocol. The implementation of the Framework will happen in stages through into 2025, to provide businesses with time to adapt to the new trading arrangements. 

Windsor Framework- A timeline

The following is a timeline of some key dates regarding the implementation of the Windsor Framework that may impact businesses in either Northern Ireland or Ireland:

01 October 2023: The UK Internal Market Scheme launches and replaces the existing UK Trader Scheme. Note: Businesses who are eligible for this scheme must register, even if previously registered for the UK Trader Scheme.

01 October 2023: The Retail Movement Scheme for prepackaged retail goods of plant and animal origin is launched. This will also include the phased introduction of new labelling requirements on certain products imported into Northern Ireland from Great Britain.

01 January 2024: Expansion of the customs duty waiver scheme with the limit for Northern Ireland businesses increasing from €200,000 to €275,000 over a three-year period.

31 January 2024: Beginning of the phased introduction of the Border Target Operating Model (BTOM) this will be particularly impactful for businesses in Ireland who are exporting medium risk plant and animal-based products to GB.

30 September 2024: Full introduction of the new Red / Green lanes. From these dates businesses importing via the green lane will no longer be required to complete supplementary declarations for goods movements into Northern Ireland.

30 September 2024: Introduction of new requirements on parcel movements from Great Britain to Northern Ireland.

01 October 2024: Introduction of Phase 2 labelling requirements when using the Retail Movement Scheme. This includes a requirement for individual labelling on all milk and dairy products being imported into Northern Ireland.

01 October 2024: Introduction of all remaining requirements set out in the Border Target Operating Model. This will include both customs and Sanitary and Phytosanitary requirements on goods which are imported into Great Britain.

01 January 2025: New rules covering the import of medicines into Northern Ireland will be introduced.

01 July 2025: Introduction of all remaining labelling requirements on goods imported into Northern Ireland through the Retail Movement Scheme. This is sometimes referred to as Phase 3 requirements.

What are Green Lanes? 

As part of the Windsor Framework the UK and the EU have agreed on the introduction of a green and red lane for goods entering Northern Ireland. Simply put the green lane is a term used to explain the level of customs processes that will be required upon import into Northern Ireland.

Due to a phased implementation approach of the Framework, the full "green lane" will take effect from September 2024 for the movement of all goods between Great Britain and Northern Ireland, though businesses registered for the UK Internal Market Scheme (UKIMS) can now take advantage of the new expanded criteria for declaring goods as "Not At Risk".

From 30 September 2024, UKIMS authorised traders will be able to benefit from providing the simplified data set to move goods through the "green lane". When making a movement, most traders will provide data about the movement to their haulier or directly to the TSS or their customs agent. The data required for the green lane can be drawn from existing commercial information and will be provided by the trader before the movement. For traders using the simplified process, there will no longer be a requirement to complete a more lengthy and complicated supplementary declaration after the goods have arrived in Northern Ireland. Traders can sign up for, or continue to use, the Trader Support Service (TSS) for support with this process. The TSS will be able to automatically populate a number of the data fields, so they don’t need to be sent every time, and submit the data to HMRC.

What are Red Lanes?

 As with green lanes, a red lane is a term used to describe the level of customs processes required upon import into Northern Ireland. Any goods which enter Northern Ireland from the rest of the UK which are bound for the EU including Ireland, or any goods which are deemed to be "At Risk" of entering the EU, will enter via the red lane.

When goods travel through the red lane full EU customs checks, paperwork and controls will apply, also including the payment of tariffs. Businesses that move goods through the red lane but whose goods do not subsequently enter the EU will be able to make use of the new Duty Reimbursement Scheme that will allow traders to reclaim EU duty paid on goods that can be shown not to have entered the EU.

What does declaring goods "At Risk" mean?

Following the introduction of green and red lanes any goods which are "At Risk" will be required to follow the red lane model. As a result, they will be required to comply with full EU customs requirements including supplementary declarations upon entry into Northern Ireland. The requirements for goods moving through the red lane will be very similar to the current requirements in place for "At Risk" goods moving from GB to NI / Ireland-EU.

Can I still use the Trader Support Service?

As a core part of the Windsor Framework arrangements, the government will continue to provide a free-to-use support service for those moving goods between Great Britain and Northern Ireland. If you are not already registered for the Trader Support Service you can do so via the following link: Trader Support Service.

What is the "Stormont Brake"?

The Windsor Framework includes a new safeguard which is referred to as the Stormont Brake. The Stormont Brake allows the Northern Ireland Assembly to veto changes in EU laws that apply in Northern Ireland if these changes are expected to cause a significant impact on everyday life.

What does the Windsor Framework mean for parcel movements from GB to NI?

From 30 September 2024, a new set of arrangements for the movement of parcels under the Windsor Framework will apply, which provides a durable basis on which to enable consumers to send and receive parcels as they do today, alongside parcel operators sharing standard commercial data with HMRC. As of that point, the same "green lane" arrangements that are applied for freight movements will also apply for parcel consignments moved between businesses. The Government will continue to work closely with parcel operators to develop these arrangements and provide support in preparing for them, including further guidance later this year.

What does the Windsor Framework change for VAT and excise?

Under the Northern Ireland Protocol, Northern Ireland is subject to EU VAT and excise rules in relation to goods. The Windsor Framework amends the legal text of the protocol to ensure that Northern Ireland will be subject to the same VAT and excise rules that apply in the rest of the UK. This will allow NI businesses to apply zero rates of VAT, in particular, the current 5% rate of VAT being applied in NI on energy-saving materials (solar panels and heat pumps) has been reduced to 0% from 1 May 2023 to align with the rest of the UK. The UK Government has described this as having "full flexibility" on VAT rates in the future by establishing new categories that can be applied for VAT purposes where goods are consumed in Northern Ireland.

Further details can be found in this guidance on GOV.UK about Energy-saving materials and heating equipment (VAT Notice 708/6). 

UK Internal Market Scheme

The UK Internal Market Scheme is now open for registration and has replaced the UK Trader Scheme. The UK Internal Market Scheme allows registered traders to declare goods "not at risk" if they are imported into Northern Ireland for sale or final use within the UK.

From 30‌‌‌‌‌‌ ‌‌September 2024, registered businesses will be able to avail of simplified declaration requirements which will remove the need for supplementary customs declarations on goods deemed "Not At Risk" upon entry into Northern Ireland. Under these new simplified processes only existing commercial information will be required. 

More information about the UK Internal Market Scheme including eligibility requirements and how to apply can be found in our article Red and Green Lanes FAQs.

Duty Reimbursement Scheme

The UK government has recently launched a Duty Reimbursement Scheme. The purpose of this scheme is to enable businesses to reclaim duty which has been paid on goods which were initially deemed to be “At Risk” but which were subsequently found to have remained in Northern Ireland. More information can be found in our full article about the Duty Reimbursement Scheme.

Will I still be able to avail of the Customs Duty Waiver Scheme?

Going forward businesses importing goods from Great Britain to Northern Ireland will continue to be able to avail of the Customs Duty Waiver Scheme. From 1 January 2024 the maximum value of duties able to be waived over the course of three tax years for "at risk" goods moved into Northern Ireland will rise to €275,000 (£235,000) from the current level of €200,000 (£170,000).

Sanitary and Phytosanitary

The Windsor Framework sets out dedicated arrangements to support the critical flow of agrifood retail products into Northern Ireland. These movements were previously supported under the Scheme for Temporary Agrifood Movements to Northern Ireland (STAMNI). This has now been replaced by a new scheme called the Retail Movement Scheme.

The Retail Movement Scheme enables a much broader range of traders to move prepackaged retail goods into Northern Ireland with a single general certificate, reducing the volume of paperwork, checks and certification requirements. 

We have a full article with lots more information about the Retail Movement Scheme including eligibility criteria, and we have an article with more information about the labelling requirements associated with the Retail Movement Scheme.

Further information

GOV.UK:

Further detail on the arrangements giving effect to the Windsor Framework.

The Windsor Framework - The Green Lane.

Apply for authorisation for the UK Internal Market Scheme if you bring goods into Northern Ireland

Northern Ireland Retail Movement Scheme: how the scheme will work

Claim a waiver for duty on goods that you bring to Northern Ireland from Great Britain or countries outside the UK and EU

Trader Support Service: How to register.

 

Prepared by the InterTradeIreland Trade Hub Team.

Article reviewed: February 2024