What is the Windsor Framework and what does it mean?

How will the Windsor Framework affect the movement of goods between Great Britain (GB) and Northern Ireland (NI)?

The Windsor Framework is the culmination of ongoing negotiations which were concluded on 27 February 2023. The new Framework, which makes changes to the Northern Ireland Protocol, has been designed to enable better trading arrangements and movement of goods between GB and NI, in a way that also satisfies the European Union (EU).

Under the original Northern Ireland Protocol, goods falling outside of the existing Framework were unable to move duty free and when moving between GB and NI, were treated as if they were moving across an international border, requiring the completion of full customs declarations and checks. The Windsor Framework aims to rectify this through the introduction of the following:

• UK Internal Market Scheme to be introduced October 2023

The new and expanded UK Internal Market Scheme (UKIMS) is designed to replace the existing UK Trader Scheme (UKTS) to allow individuals and businesses to trade with ease across the whole of the UK. The way in which to send applications to the UKIMS along with the criteria will be disclosed in the coming months. The expanded scheme will also be available to UK businesses that are not established in NI. For business already registered under the existing UKTS, goods movements up to 30 September 2023 can be moved as not ‘at risk’ using this authorisation.

Registration to join the new UKIMS is underway ready for its launch on 1 October 2023. Traders registered under the UKTS will be contacted directly to transfer the authorisation across to the UKIMS but follow up if this has not happened by 31 July 2023.

• Green Lane/Movement of goods between GB and NI (to be introduced fully by September 2024)

Under the original protocol, all goods arriving in NI from GB would be subject to full customs checks and declarations – just as if they were being imported from a non-EU country.

The Windsor Framework has designed a ‘Green Lane’ for goods that are for consumption in NI after arriving from GB. This enables goods to move freely without the requirement of being accompanied by declarations/certificates or being subjected to additional customs checks.

The ‘Green Lane’ will only be available to members of the UKIMS.

• Red Lanes/Movement of goods from GB to EU (via NI)

‘Red Lanes’ will be open to goods that are ‘at risk’ of entering the EU and therefore, full customs checks and declarations will continue for those goods. For goods that are labelled ‘at risk’ when entering NI but ultimately do not enter the EU, a new reimbursement scheme will be in operation in conjunction with the current customs duty waiver scheme.

• Duty reimbursement scheme and duty waiver scheme

The scheme allows for reimbursement of EU duty for goods arriving in NI where businesses can provide evidence showing that the goods did not move into the EU. This scheme covers the goods that are ‘at risk’ and are imported via the ‘Red Lane’. If you believe that you have been affected by having to pay duty on goods arriving in NI and remaining for consumption in NI since 2021, please contact us to discuss options further.

• Green and Red Lane for SPS goods

SPS goods include products of animal origin, plants and plant products, food and feed of non-animal products and high-risk food of non – animal origin. Due to come into effect from October 2023, the new UKIMS will permit registered businesses to use the simplified process to move goods between GB and NI, meaning that the grace period on the Northern Ireland Protocol will no longer be required to move goods such as British sausages.

• Green and Red Lane for customs

Despite the commence of the ‘Green Lane’ for SPS use in October 2023, the lane won’t be available for customs purposes until October 2024, meaning that requirements and grace periods under the Northen Ireland Protocol will still be applied on the movement of goods for the time being.  

When the ‘Green Lane’ for customs use becomes fully functional, the movement of goods from GB to NI will be simplified in the same way as SPS goods and there will be little to no requirement for full customs checks and declarations.

• Movements from NI to GB

Under the original protocol, the UK would be required to collect declarations for all goods arriving into GB suggesting that the movement of goods between GB and NI were treated as imports and exports. To alleviate the stresses of the process for businesses and customs officers, the UK Government has been able to rely on the dynamic EU VAT rules to permit classing these transactions as usual UK domestic transactions for VAT purposes where UK VAT has still been collected on the sale of goods and reclaimed on the purchase where the goods were moved between the UK and NI.

• Parcels

Under the original protocol, parcels being transported between GB and NI were subject to full customs checks and declarations.

Under the new Framework the following points will apply:

• NI consumers ordering from GB businesses will be able to continue to order and receive goods through the post.
• Parcels being sent between businesses will be able to move through the ‘Green Lane’ here the goods are for consumption either in the UK or NI.
• Consumer to consumer parcels will be waived from all customs payments and obligations.
• Parcels being sent from NI to GB will no longer subject to declarations.

These arrangements are due to be in place from September 2024.

• VAT

Under the revised rules of the Windsor Framework, EU rules on VAT rates will not apply to a list of goods for consumption in NI in certain circumstances. The agreement also enables the application of a zero-rate of VAT to energy saving materials in NI. In regard to excise, recent amendments to alcohol duty would also apply in NI.

If you would like to know more about the Windsor Framework and how your business may need to conform to the new rules, get in touch today and talk to our specialist VAT department.

Email: [email protected]

Phone: 01926 422292