The Windsor Framework: How do the new Northern Ireland regulations affect your business?

A few weeks ago, the Windsor Framework altered the Northern Ireland Protocol in some pretty significant ways. Now the dust has settled and we have a better idea of how the changes will work in practice, let’s take a look at how the new regulations impact GB-NI trade and how it could affect your own business.

Date
16 March 2023
Reading time
Around 7 min
Categories
#Accounting Advisory

In response to the UK’s exit from the European Union, new regulations and trade deals are being made to replace the ones we had as part of our EU membership. We now have laws with Northern Ireland that introduce new opportunities for trade and make existing trade much easier. The new regulations are referred to as the Windsor Framework.

Summary

  • New Internal Market Scheme (UKIMS) adds businesses to a ‘green lane’ that fast-tracks their imports to NI with less paperwork and checks.

  • 60 rules for food and drink imports have been removed, making what’s available between GB and NI much more similar.

  • Less disruption of UK-approved medication and pharmaceuticals to the Northern Irish market

  • Streamlined online shopping logistics for GB-distributed goods to NI

  • NI now part of the UK’s ‘plant passport’ scheme - plants and seeds previously banned are now not

  • VAT and alcohol duties can now be applied to NI based on UK law instead of EU regulations

Overall, the Windsor Framework lets Northern Ireland play both sides. Now it can really take advantage of its status inside the EU's single market for goods (keeping its open border with the Republic of Ireland) but also giving it more access to trade from the rest of the UK with fewer checks and controls.

Traffic light lanes

The new regulations offer an opportunity to bypass red tape by getting businesses in the ‘green lane’. British goods imported to NI with the intention of staying in NI can apply for a place in the United Kingdom Internal Market Scheme (UKIMS) to avoid stringent checks.

Scheme members will not have their goods routinely checked and will not need to offer as many certificates or paperwork as was originally in place. Customs will be a lot easier to deal with, especially if you own a small business and you don’t have the time to constantly fill out forms for the sake of your Northern Irish customers.

If you can’t get your business in the green lane or the green lane isn’t applicable for the type of trade you’re doing, you’ll be issued the red lane. It’s likely you’ll still go through fewer checks and paperwork than before but it won’t be as quick as the green lane.

As of yet, we don’t know how easy it will be to apply for the Internal Market scheme but we do know that large supermarkets and bigger businesses that are part of an existing trade agreement will be automatically transferred to UKIMS.

Rules on imported food and drinks changed

As you probably already know, the EU has strict rules when it comes to food and drink products entering its single market. The original Northern Ireland Protocol made many products cleared by the UK unable to enter Northern Ireland due to these rules.

The new Windsor Framework means that UK public health and safety standards will apply to food and drink imports in Northern Ireland instead of EU standards. The BBC reports that the government has removed over 60 EU food and drink restrictions under these new regulations.

Retailers and businesses looking to break into the Northern Irish market will have a much easier time getting their products cleared for sale. If you’re in this industry, it will afford you a great opportunity to start retailing in NI.

Traders in the green lane will only need to complete one certificate for each lorry rather than multiple certificates to clear their entry. Identity checks and visual inspections on lorry trailers will be gradually phased out from 100% today to 5% by 2025. Green lane lorries will also no longer be subject to routine inspections and only carried out if you’re suspected of abusing the system.

Exporting goods for e-commerce shops gets easier

For any business looking to operate more in Northern Ireland, this should be your main takeaway from our article.

The original NI Protocol required all parcels from GB to be cleared via a customs declaration. This is no longer the case. Since most shipping from Northern Ireland comes from warehouses in Great Britain, this will help companies substantially with their GB-NI trading unless they are a logistics company.

To safeguard contraband and illegal goods from entering NI, authorised parcel operators need to share their data with the government to monitor and manage the risk of smuggling into the EU market.

VAT and duty tax in NI follows GB

You might be surprised to learn that in the time between Brexit and the Windsor Framework, VAT and excise in Northern Ireland were under EU jurisdiction and not the UK’s.

The original NI Protocol made UK tax changes incompatible with EU rules and, as such, were not introduced in Northern Ireland. The new deal lets Northern Ireland join the rest of the UK when it comes to VAT and tax.

For example, if the UK wanted to lower VAT on certain products below a level that the EU minimum, this is now possible. The UK can also now apply reduced VAT rates in more categories of products than was previously allowed.

If you export to Northern Ireland, it’s worth keeping up to date on any VAT or tax changes. Any reductions on how your products are taxed in NI could allow you to lower your prices.

Plants and medicines are on the move to NI

The horticulture industry felt significant effects because of Brexit. A particularly hot topic has been Scottish seed potatoes as these were banned when the UK left the EU.

Garden centres and seed distributors in Great Britain have been begging for new legislation after they were unceremoniously cut off from their European and Irish customer bases. The Windsor Framework repeals this ban, allowing any plant and seed approved by the UK to enter Northern Ireland via the UK’s plant passport scheme.

Similarly, pharmaceutical companies in the UK had almost abandoned single medicine packs in NI as the market was not commercially viable enough to warrant the effort needed to produce packs that specifically satisfied the niche rules they needed to.

While the House of Lords is still not convinced all of these problems have been solved with the Windsor Framework, most critics are satisfied that the industry’s main issues have been addressed.

How do the new regulations affect your business?

If your business wants to get involved in trading goods between Great Britain and Northern Ireland, it's important to understand the implications of these new regulations.

Depending on the nature of your business and the goods you trade, you may need to make changes to your supply chain, apply for new licenses or adjust your pricing to account for reduced costs in order to break your newfound Irish market.

There may be some adjustments required to comply with the new regulations but the new GB-NI framework presents undeniable opportunities for businesses to expand their operations.

The simplified customs procedures and reduced thresholds for entry can reduce the administrative burden and costs associated with moving goods between Great Britain and Northern Ireland. They also provide certainty and stability for businesses operating in Northern Ireland, which can be attractive to investors and customers alike.

You may wish to seek legal advice to ensure you are fully compliant with the new rules.

Overall, while the new regulations bring some changes and challenges for businesses involved in trade between Great Britain and Northern Ireland, with careful planning and preparation, it is possible to navigate these changes successfully and grow your business in a new market.