This week’s bulletin covers a letter received from HMRC stating that while work on developing the duty reimbursement scheme in Northern Ireland was “continuing at pace”, no definite timeline for when it will be ready is available. We also publish updated guidance on HMRC’s approach to apportionment and can confirm that the One Stop Shop for Northern Ireland businesses is open for registration. Revenue has also issued guidance on moving goods through Northern Ireland when trading with Great Britain. We also look at the UK’s draft Subsidy Control Bill and its roadmap for financial services.
Reimbursement scheme – HMRC responds to Institute’s letter
The Institute received a response form HMRC after seeking an update on when the duty reimbursement scheme will be ready for tariffs paid on “at risk” goods brought into Northern Ireland from Great Britain that are subsequently found to have stayed in Northern Ireland.
In its response, HMRC said that “work continues at pace to develop the scheme” but they are unable to give a definite date for when it is ready.
HMRC reminded readers that there “are a range of options available to allow traders to move goods into Northern Ireland without incurring tariffs and we encourage you to highlight these to traders. We have also recently launched a tool to help traders understand their tariff options when moving goods GB-NI. It can be found at https://www.gov.uk/check-tariff-goods-ni-from-gb.”
We are aware of the cash flow and other implications of this and will keep members updated on our correspondence with stakeholders on this important issue. Read HMRC’s response.
HMRC’s apportionment approach
We have previously communicated to readers that HMRC has developed an apportionment approach that allows businesses that are authorised under the UK’s Trader Scheme to declare goods “not at risk” based on the expected outcome for the goods, where the final destination is not known at the time the goods enter Northern Ireland.
For example, if you are bringing a consignment of goods into Northern Ireland but at the time of import you do not know which item within the consignment will go where but you know that typically 60 percent of your goods move into the EU and 40 percent end up with end consumers in Northern Ireland, you can declare 40 percent of the goods as “not at risk”. This is known as apportionment.
The guidance has been updated recently to provide additional content on reconciliation and evidence to support the apportionment used. The updated guidance has not yet been published on Gov.uk but HMRC has provided us with a copy to share with our members. HMRC has stated that further functionality is planned to better support businesses in using apportionment and the guidance will be updated once this is ready.
Read the updated guidance.
HMRC confirms One Stop Shop Portal has been operational since 1 July
The EU’s VAT e-commerce rules changed with effect from 1 July 2021 and under the terms of the Protocol on Ireland/Northern Ireland, this affects Northern Ireland businesses that sell goods to the EU.
The One Stop Shop (OSS) procedure is designed to enable businesses to register in one Member State and complete one return for all EU sales. This is a major simplification and negates the needed to register for VAT and submit VAT in potentially all EU member states.
Businesses that sell goods from Northern Ireland to the EU are able to pay VAT to all EU countries through HMRC using the OSS. HMRC confirmed to the Institute in a letter that the system is operational. Updated guidance is now available, which includes a link to the OSS portal.
Read the guidance.
UK Chancellor outlines roadmap for financial services
The UK government has published a document entitled “A new chapter for financial services” outlining plans for the financial services sector to create tens of thousands of jobs and boost prosperity for years to come.
Chancellor Rishi Sunak said that the UK will use its strength as a global hub for financial services to develop and enhance relationships with countries around the world, including those with emerging financial centres.
The Chancellor said that the UK is currently in negotiations with New Zealand, Australia, Switzerland, and the United States to agree financial deals and wants to explore and deepen the UK’s relationship with merging markets such as China, Brazil, and India.
CEO of the Financial Conduct Authority, Nikhil Rathi said “financial services have a central role to play if the UK is to take full advantage of the opportunities ahead – whether that is addressing technological disruption, meeting the challenge of climate change, adjusting to a post-Covid world or using the flexibility presented by our departure from the European Union.”
The report highlights the importance of the sector to the UK’s economy, stating that financial and related professional services represent £10 of every £100 of economic output in the UK. In Northern Ireland, 36,000 jobs are created by the sector.
In his speech, the Chancellor announced that there will be a number of public consultations including on the reforms to the regulation of wholesale capital markets which opened on 1 July.
Changes to the financial services regulatory framework are also required to reflect the UK’s position outside the EU and this will be carried out through the Future Regulatory Framework Review. A public consultation will be launched in the Autumn.
Read more on GOV.uk.
Green finance
When outlining the roadmap for financial services, the Chancellor also announced that he wants to “reaffirm the UK’s position as the best place in the world for green finance”. The UK wants to ensure that the financial system plays a major role in delivering net zero carbon emissions
In his speech, the Chancellor said, “We will press for global action and build international standards, including through COP26, using our leading commercial and policy expertise to reaffirm the UK as the best place in the world for green and sustainable investment.”
To deliver this vision, the UK has already:
- Committed to making disclosures aligned with the Task Force on Climate-related Financial Disclosures mandatory across the economy by 2025
- Published the UK Government Green Financing Framework, which details how the green gilt will finance projects to tackle climate change and other environmental challenges while creating green jobs across the UK
- Issued product information on the National Savings and Investments (NS&I) Green Savings Bonds to enable UK savers to play their part in tackling climate change.
Further plans include:
- Using the UK’s international leadership of COP26 to build a global financial system that mobilises private finance to support the re-engineering of economies for net zero
- Rallying the financial services sector to commit to net zero through membership of the Glasgow Financial Alliance for Net Zero.
- Combatting greenwashing with common and transparent definitions of sustainable activities and investments.
- Requiring businesses to disclose their risks and opportunities from, and impact on, the climate and the environment through implementing integrated Sustainability Disclosures Requirements (SDR).
- Enabling consumers to see the environmental impact of their investments quickly and easily. The government will work with the FCA to introduce a sustainable investment label. This will cover retail investments using information provided through the SDR.
- Positioning the UK as the leading global market for high-quality voluntary carbon offsets.
Read more in A new chapter for financial services and on GOV.uk.
UK’s post State Aid regime – the Subsidy Control Bill
The UK introduced the new Subsidy Control Bill into UK Parliament on 30 June last. This proposed law will govern how the UK (including the devolved governments) subsidises businesses. Under the Trade and Cooperation Agreement, the UK committed to agree a new subsidy control regime.
UK Business Secretary Kwasi Kwarteng said the UK is “seizing the opportunities of being an independent trading nation to back new and emerging British industries, create more jobs and make the UK. the best possible place to start and grow a business.”
State subsidies and the concept of a level playing field was a major sticking point during the Brexit negotiations as the UK sought to break away from the EU’s rules.
The Business Secretary called the Bill “a clear departure from the EU state aid regime” and also said that the government would not use the system to bail out unsustainable companies.
The Bill establishes the Subsidy Advice Unit, located within the Competition and Markets Authority, to provide monitoring and oversight of the new regime. The Subsidy Advice Unit will also advise public authorities on specific subsidies in a limited number of cases and the Competition Appeal Tribunal will hear subsidy control cases under the law.
Subsidies that are subject to the Protocol on Northern Ireland/Ireland, where EU State Aid rules continue to apply, are carved out of the scope of the regime.
The Bill will now make its way through Parliament, and it is expected that the new regime will come into effect in 2022 if approved by the UK Parliament.
Read the Bill.
Moving goods through Northern Ireland – Revenue guidance
Revenue has issued guidance for traders importing and exporting goods from and to Great Britain through Northern Ireland. eCustoms notification 42/2021 sets out the customs formalities and declarations needed when routing goods this way.
Revenue has also reminded readers of the following contacts:
- For queries relating to import policy please contact Import Policy Unit – importpolicy@revenue.ie
- For queries relating to export policy please contact Export Policy Unit – exportpolicy@revenue.ie
- For queries relating to technical issues with the import or export declarations, lodged to Irish Revenue, please contact eCustoms Helpdesk – ecustoms@revenue.ie
- The Brexit unit can be contacted at brexitqueries@revenue.ie
Read the eCustoms notification
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