A red lane and green lane? Brexit finally done? VAT changes?
A lot has happened in the past 48 hours with the Prime Minister looking to reach an agreement on the Northern Ireland Protocol. This new agreement has been dubbed “The Windsor Framework” but what does this mean for transport and freight?
What is the Northern Ireland Protocol?
The NI Protocol is the trading agreement that was first negotiated during Brexit allowing goods to be transported across the Irish land border – allowing goods to move without the need for customs checks.
However the EU has strict rules for some items on non-EU trade. Thus making it hard to strike a deal.
This special agreement was to keep a level of continuity in trade and to uphold and protect The Good Friday Agreement. Now the UK is looking to change things with agreement from the EU.
Red light, green light
The new plan sets up a green lane and red lane, green for goods only going to Northern Ireland, meaning no checks on the majority of shipments and minimal paperwork. The red lane would be for goods due to travel into the Republic of Ireland or deemed “at risk” of doing so and would face customs checks at NI ports.
Exporters and importers will now need to be registered as a ‘trusted trader’ to use the green lane. All UK-based traders are eligible to apply with HMRC and will need to provide details of any goods they move.
The old way
Goods are checked at ports in NI on arrival, regardless of if they are destined for NI or ROI, then moved to their final destination.
The new way
Goods arrive in NI in one of two lanes, Green lane goods for NI only and this will eliminate unnecessary paperwork, checks and duties.
Red lane for ROI and the EU are checked and moved on. Data-sharing and labelling arrangements will keep this system in check.
A shift in VAT?
Under the old NI Protocol EU VAT rules apply to NI, meaning that any change in UK rules won’t affect NI. Now the UK has “secured full, lasting powers for the UK to set VAT and excise rules in NI. We have done this by removing existing rules and preventing other new EU VAT rules from applying in NI.”
The rules on movement of certain goods have shifted from UK exports to NI. Chilled Lincolnshire sausages are now back on the menu for Northern Ireland. Less restrictions on the movement on such goods we would expect to uptick food freight movement.
Stormont’s say on The Northern Ireland Protocol
Northern Ireland lacks a say in changes in EU rules, whilst being still affected by these rules as part of the Protocol. The changes now seem to be moving towards Stormont having more say and greater input in the future, a new “Stormont Brake” will allow the NI assembly to prevent some EU rules.
A statement from our Commercial Director, Geoff Yates on The Northern Ireland Protocol
“There are so many reasons to be cheerful with the announcement of the newly agreed Northern Ireland Protocol. The financial markets certainly relished it with strong performances reported on the stock exchange on Monday afternoon and Sterling rising rapidly against both the US Dollar and the Euro too.
Brexit is finally done. A full six years after the 2016 referendum an agreement to suit both sides of the separation is certainly welcomed by Northern Ireland.
A good sign of things to come was the sight of the smiling European President, Ursula von der Leyen and Prime Minister Rishi Sunak, signalling an improvement between the UK and the EU.
In practice, it’s difficult to say what it will mean for the movement of goods from GB to Northern Ireland. The introduction of a “Green lane” for British goods via a trusted trader scheme certainly points to a significant easement but as ever the devil will be in the detail.
From our point of view, at the front line of cross border movements, Mondays announcement regarding the Northern Ireland Protocol and improving UK-EU relations was greatly received.”
More information on the government website