Agreed in February 2023 as an update to the Northern Ireland (NI) Protocol, The Windsor Framework came into effect on 30th September 2024 with a view to making the process of moving goods between the UK and NI easier. However, this has meant that businesses involved in the movement of goods between the UK and NI, and those subsequently shipped to an EU member state need to be aware of the changes in reporting requirements as well as duty implications.

This involves establishing two channels;

• Green lane: for goods not at risk of being shipped to an EU member state where customs duty does not become payable. Utilising this lane means that goods will no longer move on the basis of international customs requirements but with a new system based on commercial information. To access the green lane processes, traders must be authorised under the new UK Internal Market Scheme (UKIMS), which replaced the UK Trader Scheme. This was a system that allowed businesses to declare their goods as not 'at risk' of moving into the EU, enabling them to benefit from tariff exemptions when transporting goods from Great Britain to Northern Ireland. To state goods are not ‘at risk’ traders must be able to show goods don’t leave NI for an EU member state which, in practice, may be difficult to prove when selling from business to business, as it requires the declarant to account for the NI customer’s use of the goods.
• Red channel: for goods ‘at risk’ such as those that may go on to the EU - duty becomes payable on these goods clearing into NI. However, there is a waiver scheme where the value of goods at risk is below a certain value - (£235,000 over three tax years), no duty will become due - this constitutes claiming relief at the point goods are declared at risk through the Trader Support Service (TSS). The TSS is a UK government-backed initiative designed to assist businesses navigating the complexities of moving goods between Great Britain and Northern Ireland following the UK's departure from the European Union.

The Windsor Framework is being introduced to address the disruption felt since the introduction of the NI Protocol. However, businesses involved in trade with Northern Ireland need to be aware of requirements arising from these new regulations. To discuss how this will affect you or your clients, please contact our team of expert consultants on our free VAT helpline at 0161 477 6600 or email enquiries@thevatpeople.com.