Excise Duty (Withdrawal of Alcoholic Drinks in Northern Ireland and Miscellaneous Amendments) Regulations 2021

Who is likely to be affected

Companies transporting spirits and alcohol duty free for denaturing from Great Britain (England, Scotland and Wales) to Northern Ireland.

General description of the measure

This measure makes changes to secondary legislation governing the movement of excise goods by businesses, and more specifically, the movement of duty free spirits and denatured alcohol from Great Britain to Northern Ireland.

The amendments implement certain requirements for such movements with the aim of restoring the situation of excise duty liability for these movements to approximately what it was before the end of the transition period.

In addition, the measure makes minor changes to secondary legislation on alcohol customs stamps in order to align terminology used throughout UK law.

Policy objective

The changes to the legislation will simplify the requirements for applying excise duty relief to the movement of spirits and spirits duty free for denaturing from Great Britain to Northern Ireland.

Context of the measure

The United Kingdom’s exit from the European Union (EU) brought about certain changes in the functioning of the excise duty regime, in particular with regard to the movement of excise goods from Great Britain to the United Kingdom. North Ireland.

These changes were implemented by legislation introduced at the end of the transition period in accordance with the Northern Ireland Protocol to the Withdrawal Agreement. This meant that the legal situation regarding the movement of excise goods from Great Britain to Northern Ireland had changed. The introduction of an excise duty on goods entering Northern Ireland had an impact on the way in which exemption from excise duty in the United Kingdom could be claimed on the withdrawal of spirits and liquor. alcohol duty free for denaturing from licensed warehouses in the UK for delivery to licensed users in Northern Ireland.

Detailed proposal

Effective date

The measure will take effect from December 9, 2021.

Current law

Under the UK duty-free spirits regime, companies can benefit from exemption from UK excise duties for spirits used for medical and scientific purposes as well as for certain manufacturing uses. Before the end of the transition period, a registered warehouse keeper could withdraw spirits intended for such use from an authorized warehouse in the United Kingdom, for delivery to an authorized user of spirits duty-free anywhere in the United Kingdom. – United, without payment of excise duties. After the end of the transition period, the introduction of a tax on goods entering Northern Ireland meant that spirits had to be suspended to avoid having to pay UK excise duty upon entry into Ireland from North. This means that the goods can no longer be delivered directly to the authorized user and must first be dispatched to an excise warehouse in Northern Ireland. The exemption can then be applied to these goods when they leave that warehouse in Northern Ireland, increasing the administrative burden and financial costs associated with the supply of spirits duty-free from Great Britain to Ireland from North. These changes will again allow goods to be delivered directly to the authorized user duty free.

Regarding denaturing alcohol, before the end of the transition period, movement of alcohol to an approved or licensed denaturator in the UK operated very similarly to duty-free spirits. The goods could be removed from the warehouse without payment of excise duty and then delivered to a licensed or authorized denaturer anywhere in the UK. Denatured alcohol is alcohol made unfit for consumption by the addition of authorized substances (denaturing agents), which makes it not subject to excise duty. A denaturer is a person authorized by HMRC to denature dutiable alcoholic beverages.

Since the end of the transition period, these movements must be delivered to an excise warehouse in Northern Ireland, before being delivered to an authorized denaturer in Northern Ireland. The changes we are making will effectively allow alcohol to be delivered directly from warehouses in Great Britain to denaturators in Northern Ireland, without the need to first deposit the goods to an excise warehouse in Northern Ireland. upon arrival in Northern Ireland. In other words, it will restore the position to roughly the level that existed before the end of the transition period.

This instrument also makes minor changes to the changes made to the Customs Stamps Regulation 2006 by Excise Duties Regulation 2020 (Northern Ireland Miscellaneous Amendments and Amendments) (EU Exit) in order to align part of the terminology over that used in UK law.

Proposed revisions

The changes will relieve spirits of excise duties resulting from Section 4 (1) of the Taxation (Post-Transition Period) Act 2020 (2020 Act), upon their removal from authorized premises in Great Britain for delivery to Northern Ireland. .

For relief to apply, zero-rated spirits shipped to Northern Ireland from Great Britain must always be accompanied, from the time they are shipped from a warehouse until the spirits are received. by the authorized user, of 2 copies of a signed and dated document which contains the details set out in the appendix to these regulations and the details of any excess or deficiency in the spirits delivered.

As regards alcohol, the excise duty re-invoiced due to Section 4 (1) of the 2020 Act will be exempt when it is withdrawn for denaturing in Northern Ireland from Great Britain . Similar movement documents are required to demonstrate that this is a legitimate movement to a licensed or licensed denaturer.

There are also 2 minor changes to the changes made to the Customs Stamp Regulation 2006 by the Excise Duty Regulation 2020 (Northern Ireland Miscellaneous Amendments and Amendments) (exit from the EU):

  • the definition of “external territory” is changed to reflect the fact that the UK is no longer an EU Member State
  • references to ‘UK registered consignee’ are replaced by references to ‘Northern Ireland registered consignee’, and a definition of ‘Northern Ireland registered consignee’ is inserted – this to reflect the fact that the scheme of registered recipients only applies in Northern Ireland

Summary of impacts

Chessboard impact (million pounds sterling)

2021 to 2022 2022 to 2023 2023 to 2024 2024 to 2025 2025 to 2026 2026 to 2027
None None None None None None

This measure should not have an impact on the chessboard.

Economic impact

This measure is not expected to have significant economic impacts.

Impact on individuals, households and families

There should be no direct impact on individuals, households and families, as the measure only concerns companies.

The measure should not affect the formation, stability or break-up of the family.

Impacts on equality

It is not expected that there will be any impacts on groups sharing protected characteristics.

Impact on businesses, including civil society organizations

A positive impact on business is expected as although the measure implements certain requirements, it will broadly simplify the current process of transferring duty-free spirits and alcohol for denaturing from Great Britain to Northern Ireland.

There should be no impact on civil society organizations.

Operational impact (millions of pounds sterling) (HMRC or other)

This measure is not expected to have an operational impact on HMRC or other government departments.

Other impacts

Other impacts have been taken into account and none have been identified.

Monitoring and evaluation

The measure will be kept under review through communication and ongoing stakeholder engagement with trade bodies and other representative businesses.

Additional tips

If you have any questions about this change, please contact Cesar Yanchev by phone: 03000 532 030 or by email: [email protected]

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