Prime minister Rishi Sunak on 27th February 2023, announced the new landmark ‘Windsor Framework’ arrangement for goods moving between Great Britain (GB) and Northern Ireland (NI) alongside European Commission president Ursula von der Leyen. It will replace the current NI Protocol that was ratified in January 2020 as part of the Brexit Withdrawal Agreement. This is what it means for businesses in the UK.
Green & Red Lane
A new Green Lane will be implemented across the Irish Sea, as part of the UK's new internal market scheme, freeing traders that sell goods to Northern Ireland from unnecessary paperwork, checks, and duties that currently exist under the NI Protocol. Going forward only standard commercial information will need to be shown.
The Green Lane will also be extended to cover food retailers and hospitality businesses, reducing the need for Sanitary and Phytosanitary (SPS) checks and paperwork by marking goods as "not for EU" through a single declaration.
Small and medium businesses bringing goods into NI for further processing or manufacturing and “not at risk” of moving into the EU, will also benefit from an increased turnover threshold of £2m to allow access to the Green Lane.
The Green and Red Lane scheme will mean grocery businesses will have to allocate goods to different loads on transport depending on their intended destinations. Goods sold and intended for NI stores will not be legally for sale in Irish stores.
Goods destined for the EU will use the Red Lane, requiring customs processes and other checks at Northern Ireland ports.
These new rules are expected to take effect in the fall of 2023, and in the meantime, traders should continue to complete declarations for GB-NI goods movements as before.
All requirements for trade from Northern Ireland to Great Britain have been permanently removed, including the need for export declarations.
UK Internal Market Scheme
In order to utilize the Green Lane, businesses must register as a trusted trader under the new UK Internal Market Scheme (UKIMS).
Traders who are not part of the existing UK Trader Scheme will only need to complete a one-time registration, providing information about their operations and the goods they will transport.
When the new scheme is launched, businesses currently using the UK Trader Scheme will be re-authorised onto UKIMS. Additionally, other schemes will either be expanded or replaced as part of the new framework, including the current Scheme for Temporary Agri-food Movements to NI (STAMNI). The Trader Support Service (TSS) will support the new scheme.
VAT
The agreement ensures permanent protection for Northern Ireland's position in the UK's VAT area by lifting the restriction on the quantity of VAT rates permitted and enabling the UK complete flexibility for future VAT rate changes and amendments.
More than 1,700 EU laws, along with the European Court of Justice's interpretation and oversight, have been eliminated in areas such as VAT, medicines, and food safety. As a result, the UK government and courts will be responsible for decision-making and interpretation. Only a small number of EU regulations, less than 3%, will remain in place to ensure Northern Ireland businesses retain full access to the EU Single Market and prevent a hard border on the island of Ireland.
Critical VAT and excise changes will now apply to the whole of the UK. This means that the application of zero-rates of VAT on energy saving materials like solar panels and alcohol duty reforms will now also applicable to Northern Ireland.
The scheme will take effect from 1st May 2023.
