Briefing Note:
1 May – UKIMS Registration – The Answer to the Irish Sea Border?
It has been suggested that businesses can to a very significant degree avoid the new parcels border that comes into force today, and indeed the wider customs border, such that they are only subject to minimal paperwork, so long as they become UKIMS (UK Internal Market Scheme) Registered. This greatly underplays the difficulty.
There are three problems:
Many Companies are Ineligible for Easements
The first problem is that easements are only available for companies with a turnover of less than £2 million. Put another way, if your company has a turnover of more than £2 million you will have to make full customs declarations. This is a major constraint. While £2 million might sound like a lot of money to an individual, it is not for a company that employs people. Although there are some movements (some food, health, and construction materials) in relation to which the EU has intimated a willingness to waive the £2 million limit, in most contexts it will apply. See: Apply for authorisation for the UK Internal Market Scheme if you bring goods into Northern Ireland – GOV.UK
This is a dark day especially for Northern Ireland manufacturers with a turnover of more than £2 million, who depend on getting their inputs from Great Britain, many in parcels, rather than the Republic which is not a manufacturing economy.
The second point to make is that even if you comply with the ceiling imposed on Northern Ireland aspiration by the £2 million threshold, not all goods movements are eligible for this simplified procedure in any event. The Government has divided goods into three Categories.
- Category 1 goods have to be moved subject to full customs declarations. They are ineligible for the simplified procedure.
- Category 2 goods have to be moved subject to full customs declarations unless both the following are met:
- they do not fall under Category 1
- a H8 controlled declaration, or a I1 C&F controlled declaration is submitted
Even in this event full simplification is denied. An 8-digit commodity code is required as well as licensing and documentary controls.
- Standard Goods which are eligible for the simplified process. See: Simplified Process for Internal Market Movements (SPIMM) — Category of goods – GOV.UK
Thus, if the option of UKIMs movements is not taken from you by means of your having a turnover of over £2 million, it could be taken from you if you move Category 1 goods and, even if you can avoid a full customs declaration in moving Category 2 goods, you will have to negotiate additional hurdles and complexity beyond the UKIMs mechanism.
Finally, even if you benefit from UKIMs easements this does not have the effect of removing the border. You still have to have an export number and provide information that you don’t have to provide when moving goods within an internal market. You also have to apply to become UKIMS registered which is complicated and you have to be subject to ongoing checks. None of these burdens are placed on you if you move goods within an internal market, as in GB, or anywhere else for that matter. These burdens testify to the presence of the border.