Navigating At Risk - Understanding customs duty when moving goods from GB to Northern Ireland

This article will help businesses understand how to identify the applicable rate of duty, understanding when to classify goods as "At Risk/Not At Risk" and what steps you can take to mitigate the impact of duty on your operations

Contents

Introduction
What do we mean by customs duty?
How to identify customs duty
I have a Commodity Code. How do I know what the tariff is?
How do I know if my products are "At Risk?"
What if I can’t meet one of the above options?
Summary
Useful Links

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Introduction

At the Cross-Border Trade Hub one of the most common topics we get asked about is customs duty/tariffs, especially understanding if goods are classed as "At Risk" upon entry into Northern Ireland. 

This article will focus on customs duty on goods imported into Northern Ireland from Great Britain. It is important to note that requirements for goods imported from other countries into Northern Ireland, along with possible ways to mitigate the impact of customs duty, may vary.

What do we mean by customs duty?

Customs duty, sometimes referred to as 'tariffs', is a tax which is designed to give a price advantage to locally produced goods over goods with similar characteristics imported from another customs territory. Customs duty also acts as a revenue raising mechanism for governments.

How to identify customs duty

The first step for any business importing into Northern Ireland in identifying any possible tariff liability is to ensure that they have chosen the correct commodity code for the item being imported.

A commodity code, otherwise known as an HS or Tariff code is an internationally recognized sequence of numbers that is used to classify a product which is subject to import/export. A commodity code will set out requirements including applicable tariff/VAT rates, along with any other specific requirements such as quotas, embargoes, or licence requirements which an item may be subject to. When importing, a commodity code will be 10 digits long.

Choosing an incorrect code can result in a business paying the incorrect amount of customs duty and can result in serious legal consequences. For further advice on how to choose the best commodity code for your products, see our comprehensive guide to commodity codes.

I have a Commodity Code. How do I know what the tariff is?

Once the correct commodity code has been identified the next step is to identify the applicable tariff rate associated with the chosen commodity code.

Step 1:

Businesses should insert the applicable commodity code into the search bar on the Northern Ireland Online Tariff pages of GOV.UK.

Here's a screenshot of the Northern Ireland Online Tariff page:Step 2:

Scroll down until the box titled "Importing into Northern Ireland" appears.

Here's a screenshot showing the section you are looking for:

Step 3:

Select Import duties.

Here's a screenshot showing the Import Duties section:

Under "Import duties" businesses should first look for the option that says "All countries". This option will set out the default rate of duty for the products they are importing. This duty rate is also known as the Common External Tariff (CET).

How do I know if my products are "At Risk"?

To identify if you will be required to pay a tariff on imports into Northern Ireland from Great Britain businesses should consider asking the following questions on each item imported:

1.  Is the Common External Tariff Rate Zero?

The EU Common External Tariff is the default rate set by the EU for all imports into their customs union. If this rate is zero percent, the goods in question can automatically be declared as being “Not At Risk” irrespective of their end destination and there will be no applicable customs duty to pay upon import into Northern Ireland.

2.   Can I use the UK Internal Market Scheme? (UKIMS)

The UK Internal Market Scheme allows registered businesses to declare goods as being "Not At Risk", if they can demonstrate that the goods being imported are going to stay in Northern Ireland/return to Great Britain and are not going to enter Ireland or the EU.

If you have registered for the UK Internal Market Scheme and you can demonstrate that your goods are going to stay in Northern Ireland, you can self-certify that your goods are "Not At Risk" and as a result will not be required to pay any customs duty.

When declaring goods as being "Not At Risk" it is essential that appropriate evidence is retained to illustrate that the goods were correctly declared "Not At Risk".

It is important to note that if you move goods which are subject to commercial processing in Northern Ireland there are additional requirements which will need to be met to use this scheme. You can find more information about these requirements and how to register in our UK Internal Market Scheme article.

3.  Claiming Preference under the TCA

If unable to use the UK Internal Market Scheme, businesses may wish to consider claiming preference under the TCA.

In December 2020 the UK/EU announced the signing of the Trade and Cooperation Agreement. This trade agreement set out the future trade relationship between the UK and EU. A key part of this agreement is the ability of goods which meet all relevant rules of origin to trade tariff free between the UK and the EU.

This means that if a business in Northern Ireland is importing an item from GB, for which it can be demonstrated that it is of UK origin, then they will be able to import into Northern Ireland without being required to pay customs duty. This is the case even if the goods are subject to commercial processing or if they will enter Ireland.

Should a business wish to claim preference under the TCA, it is imperative that they retain sufficient proof illustrating that all origin requirements have been met.

Businesses in Ireland who import goods of UK origin from GB can also claim preference to help minimise the impact of customs duty on business operations.

What if I can’t meet one of the above options?

If you cannot meet one of the above options your goods will be subject to customs duty upon entry into Northern Ireland. There may however be ways in which the impact of this customs duty on business operations can be minimised. More information can be found in GOV.UK guidance about Trading and moving goods in and out of Northern Ireland.

Businesses could consider:

• Customs Duty Waiver

Businesses in Northern Ireland can claim a waiver for any customs duty on goods imported into Northern Ireland. This means that as opposed to using their own funds, they can offset from their De Minimis Aid allowance up to a maximum value of €300,000 over three tax years.

More information into how to claim a waiver and all reporting requirements can be found in our article about customs duty waiver.

• Duty Reimbursement Scheme

If you have declared goods as being "At Risk" and paid customs duty only for the goods in question to stay in Northern Ireland, you may be able to reclaim the duty payments via the Duty Reimbursement Scheme. This is a new scheme that was launched in June 2023. More information about this scheme including how to apply and what evidence is required can be found in our Duty Reimbursement Scheme article.

• Customs special procedures e.g. Inward Processing

In addition to the customs duty waiver or Duty Reimbursement Scheme some businesses may be eligible to avail of customs special procedures. Customs special procedures are mechanisms which allow businesses to avail of relief from/suspension of customs duty and VAT when imported.

One of the most common customs special procedures is known as Inward Processing Relief. This allows businesses who import goods which are subject to commercial processing before being exported outside of the EU to suspend the requirement to pay customs duty upon entry into either Northern Ireland/Ireland. Should these goods then be sold outside of Northern Ireland or the EU, there will be no subsequent requirement to pay the duty.

It is important to note that businesses seeking to use Inward Processing Relief will be required to obtain authorisation from HMRC prior to being able to use this procedure when importing.

We have more information about Inward Processing Relief including how to obtain authorisation.

Summary

Understanding when to pay customs duty/tariffs can be extremely complicated. By following the steps outlined above businesses can ensure that they correctly determine the appropriate rate of duty, and can ensure that steps are in place to manage the impact of customs duty on business operations.

Useful Links

The following are some links which businesses who are importing goods into Northern Ireland may find useful:

• Trading and moving goods in and out of Northern Ireland - GOV.UK.
• Trader Support Services
• Trade-Tariff Service - GOV.UK
• Moving goods from Great Britain to Northern Ireland - NI Customs Academy

 

Prepared by the InterTradeIreland Trade Hub Team

Article Reviewed: February 2023