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Excise duty refund on diesel for road transport: publication of new refund rates


This article addresses significant UK changes to UK customs law following Brexit.

  • Status of Northern Ireland

  • Customs checks

  • Origin

  • Tariff Codes

  • Other Issues


Status of Northern Ireland


This area is fast developing, and we will report on all further developments as they occur.

Under the terms of the NI Protocol to the UK-EU Trade and Co-operation Agreement (TCA), NI remains within the EU for most purposes related to customs controls in order to avoid a “hard border” between the Republic and NI.

Legislation to allow unilateral changes to the NI Protocol is NOT being brought forward in the next session of Parliament, although media reports suggest that legislation could be brought forward. However, there is a faction within the UK Government which thinks this is a good idea and is keen to pursue this option and legislation could be brought forward.

If the UK does try to amend aspects of the NI Protocol without EU agreement, the effect will depend on what those changes actually are and also on how the EU decides to respond. The UK will likely say that cross-border trade will continue to operate as before, i.e. no customs declarations or checks. We believe that the EU will be reluctant to simply terminate the TCA but will want to send a message to the UK that legal agreements, once entered into need to be respected and so will probably look to some kind of targeted response, possible focussed on the UK rather than NI. Attitudes may be hardening on both sides however, and the EU has not ruled out abrogation of the TCA if the UK tries to amend the Protocol unilaterally.

Customs checks

Certification and physical checks on food and animal goods from the EU were initially due to be introduced on January 1 this year.

The controls were then put back to July 2022, due to supply chain disruption caused by the coronavirus pandemic and increased immigration red tape.

Full customs declarations and controls were introduced on January 1, as planned.

But the UK Government now says that the remaining measures "will no longer be introduced this year" and would instead come into force "at the end of 2023".


The problem with Origin arrangements which are usually set out in an Annex or Protocol to a wider trade agreement, is that they are difficult to meaningfully alter. In theory difficulties can be addressed when revisions to the relevant Agreement are negotiated but in practice this rarely happens.

The TCA (Origin: Articles 37 to 65 and Annex II) was agreed in some haste and consequently has some significant problems, notably for example with regard to products which may be exported from one side to the other for processing and return (cf Colin the Caterpillar).

Therefore, the deficiencies and problematic aspects of the origin rules will have to be challenged and resolved through discussions with the customs authorities or, in extreme cases, the Courts.

Tariff Codes

The UK Customs Tariff introduced on 1 January 2021 was an exact replica of the EU Tariff, except for the duty rates which were mostly pitched slightly below EU levels. The structure of the Tariff – first 6 digits of all Tariff Codes is subject to international treaty managed by the World Customs Organisation, the Harmonised System (HS). On 1 January 2022 a major revision to the HS introduced, for example, a new Tariff Heading 2404 for ecigarette products. The UK’s implementation of this exactly matches the EU version.

Possibly, for now, it is easier to keep the UK on the same page as the EU to avoid additional difficulties for importers/exporters based in Northern Ireland (see above).

However, over time the UK Tariff structure is likely to increasingly diverge from the EU Tariff as issues which are important to one side may not be of interest or relevance to the authorities on the other side. For example, there are 361 separate subcategories within HS Heading 2204 (Wine of Fresh Grapes). This includes separate designations for wine “produced in the European Union”, as well as individual subcategories (TARIC Subheading) for specific Regions with a Protected Designation of Origin (PDO – 17 just for white wines) or Protected Geographical Indication (PGI). It is not obvious why these categories in their current form should be of interest to UK authorities going forward, and a rationalisation of the UK tariff structure could radically alter this area of the Tariff. Conversely Heading 2203 (Beer made from Malt) which has just 3 subcategories could be an area where the UK would like additional granularity.

Other issues

Only tangentially related to Brexit but on the customs agenda.

  • Brexit Laws “Bonfire”

In the Queen’s Speech (Tuesday 10th May) the government announced plans to remove EU rules, including new powers to do so without further legislation.

  • Customs Systems changes

The long-awaited switch over to the new Customs system is now scheduled for April 2023 when the legacy system CHIEF will be retired. CHIEF has been operating since the 1980’s and its life has been extended, partly because of problems with the implementation and partly because of the challenges of Brexit including huge numbers of new declarations.

CHIEF is a well-understood and simple system with defined outputs based on the EU’s Single Administrative Document (SAD). CDS is based on Data Elements and Code groups which are not immediately understandable without interpretation. HMRC has, apparently deliberately, chosen not to specify output formats for CDS so it is probable that importers/exporters using more than one logistics provider will find differing methods of displaying the same information. Instructions to customs agents will need to be modified. Significant training is needed in the next 6 months or so to get logistics providers and compliance specialists up to speed.

CHIEF imports will close on 30 September 2022 and not 31 March 2023.

  • Alcohol duties

In the 2020 budget the Chancellor said that HMRC would consult on changes to the alcohol taxation regime. The principal products affected would be wine and to some extent cider as the government wants to more closely follow alcoholic strength (ABV) for these products, with some simplification of banding. Some spirit based drinks with relatively low alcohol (less than 22% ABV) may see duty rate reductions. The outcome of the consultation and any legislation to give effect to this is likely in the autumn.

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