HMRC is writing to all holders of the UK Trader Scheme (UKTS) authorisation to inform them of the upcoming actions they need to take because of the Windsor Framework.

The existing UKTS will cease to exist from 30 September 2023. It is being replaced by the UK Internal Market Scheme (UKIMS). HMRC has confirmed that any application for the UKIMS received after 31 July 2023 may not be processed in time. It is crucial that traders take immediate action to ensure timely approval under the new scheme. 

While the information required for the original UKTS was relatively straightforward, the additional controls under the Windsor Framework requires HMRC to request additional information to ensure an applicant can comply with the new rules.   

Notably, the revised requirements entail providing more detailed information on procedures and records to ensure there are satisfactory controls on the goods to minimise the risk of unauthorised movement into the EU.   

In most cases these will not be simple processes. Additional controls may need to be introduced and operated to ensure that the business complies with its obligations. HMRC has played down the business risk of failing to have sufficient controls in place, as there is a willingness to ensure a smooth transition under the Windsor Framework. 

However, as the UKIMS will be the tool that HMRC uses to ensure that the Green Channel is operated effectively, authorisation holders must take their responsibilities seriously. 

Andrew Thurston, Customs Duty and Indirect Tax Consultant at MHA says, “Like many other customs authorisation applications, HMRC does not provide advice and assistance to applicants to ensure they are fully familiar with the new process. It is therefore important for any UKIMS holder to determine and implement the processes and documentation for Northern Ireland movements to minimise the risk of errors, or missing documentary evidence. As this is a special agreement with the EU, there will be particular focus on the application of the simplifications under UKIMS. HMRC will be tasked with auditing authorisation holders with any errors being subject to potential assessment action.” 

ICAEW’s Tax Faculty recommends that UKTS holders act now to apply for UKIMS. They should also review the new requirements to avoid unnecessary delays in the application process, while ensuring the business understands and applies satisfactory controls. These rules are complex, and traders should seek professional advice. 

ICAEW’s Tax Faculty is recognised internationally as a leading authority and source of expertise on taxation. The faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.

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