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UK Brexit Taxation Bill – GB to NI customs and VAT

  • Dec 6, 2020 | Richard Asquith

8 Dec update - the UK has agreed via the UK-EU Joint Committe on Northern Ireland that it will not include the most controversial terms below on GB-NI tariffs which threanted to overwrite the Northern Ireland Protocol. The same has been settled on the Internal Market Bill (NI-GB customs declarations; state aid). 

The revised Bill now covers Northern Ireland (NI), UK excluding NI (GB) and EU customs and VAT rules:

  • provision to levy EU customs duties (tariffs) on goods moving from GB to NI where intended to be sent to Ireland or other EU countries, or if the goods are to be considered 'at risk' of moving to the EU
  • provision for levying tariffs on imports into NI from the rest of the world
  • VAT rules for goods moving into NI, or into NI for subsequent movement to EU or GB.

Taxation Act threatend NI Protocol

The UK government had planned to present to Parliament on 9 December its Taxation (Post-Transition Period) Bill 2019-21 which would cover the customs duties (tariffs) and VAT treatment of goods moving between Great Britain and Northern Ireland (NI). The Bill recategorize such movements as UK internal movements, and would have overwriten the Brexit Withdrawal NI Protocol in the event that the EU and UK do not reach a tariff-free Free Trade Agreement (FTA) before 1 January 2021.

This threatened to undermine the delicate final stages of the EU-UK FTA negotiations as the Bill would contravene the Protocol settlement. The EU stated that such a move would undermine its confidence in concluding any UK FTA. The Taxation Bill follows the UK’s Internal Market Bill, now also modified, which also threatened to rewrite terms of the Protocol relating to customs declarations between GB and NI, as well as state aid rules.

FTA limits tariffs, customs declarations and VAT on GB to NI goods

The Protocol envisages EU tariffs falling due on goods moving GB to NI, based on NI taking up a dual position in the UK and EU customs and VAT areas after 31 December 2020. This would require customs declarations and tariff payments (in the event of no FTA being struck by 31 December 2020) at NI ports rather than creating the need for customs and border checks between NI and Ireland. The Protocol established a ‘Joint Committee’ to come up with a limited list of goods that would come under this requirement, known as goods ‘at risk’ of moving from NI to the EU. In the event of no FTA, the default position would be tariffs and customs declarations on all GB to NI goods movements.


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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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