Taxation (Cross-border Trade) Bill (HC Bill 128)

Taxation (Cross-border Trade) BillPage 20

(c) power to make supplementary, incidental and consequential provision,
and

(d) power to make transitional or transitory provision and savings.

(8) Any power to make regulations under any provision of this Part does not
5restrict the width of any power to make subordinate legislation under—

(a) any other provision of this Part, or

(b) CEMA 1979 or any other enactment.

(9) Subsections (6) to (8) apply in relation to any public notice under this Part; and
any provision that may be made by a public notice under this Part may be
10made by regulations.

(10) An Order under section 31—

(a) is not to be submitted to Her Majesty in Council unless a draft of the
Order has been laid before, and approved by a resolution of, the House
of Commons, and

(b) 15if it revokes an earlier Order under that section, may contain
transitional or transitory provision and savings.

(11) After it is established, the Secretary of State must consult the TRA before
making regulations under Schedule 4 or 5.

(12) Any power of HMRC Commissioners to make regulations under this Part is
20exercisable concurrently by the Treasury.

Interpretation etc

33 Meaning of “domestic goods”

(1) Goods are domestic goods for the purposes of this Part if—

(a) they are wholly obtained in the United Kingdom, or

(b) 25they have been subject to a chargeable Customs procedure.

(2) For the purposes of this section goods have been “subject to a chargeable
Customs procedure” if—

(a) the goods were declared for the free-circulation procedure and the
procedure has been discharged, or

(b) 30the goods were declared for an authorised use procedure and the
procedure has been discharged.

(3) Goods cease to be domestic goods if—

(a) they are exported from the United Kingdom, and

(b) the export is one which is required to be made in accordance with the
35applicable export provisions,

and the goods are then chargeable goods until such time (if any) as they are
next subject to a chargeable Customs procedure.

(4) For the purposes of subsection (3), every export of goods is required to be made
in accordance with the applicable export provisions unless an exception
40provided for by regulations made by HMRC Commissioners applies to the
export.

Taxation (Cross-border Trade) BillPage 21

(5) HMRC Commissioners may by regulations make provision for goods exported
from the United Kingdom in accordance with the applicable export provisions
to retain their status as domestic goods if—

(a) the goods merely pass through places outside the United Kingdom
5before arriving at their ultimate destination in the United Kingdom, or

(b) the goods otherwise remain outside the United Kingdom for a
temporary period.

(6) The provision that may be made by the regulations includes—

(a) provision requiring conditions to be met in relation to the goods while
10they are outside the United Kingdom, and

(b) provision requiring the making of a declaration in connection with
their subsequent import into the United Kingdom.

(7) Goods that are in the United Kingdom are presumed to be domestic goods
unless the contrary is shown.

(8) 15The Treasury may by regulations make provision—

(a) as to cases in which goods are, or are not, to be regarded as domestic
goods for the purposes of this Part,

(b) for reversing the presumption that goods are domestic goods in
specified cases (so that they are presumed not to be domestic goods
20unless the contrary is shown), and

(c) as to the evidence which is to be required, or is to be sufficient, for the
purpose of showing that goods are domestic goods.

34 Presentation of goods to Customs on import or export

(1) For the purposes of this Part, goods are presented to Customs on import if—

(a) 25the goods are lawfully imported into the United Kingdom, and

(b) notification of their importation into the United Kingdom is given to
HMRC in accordance with provision made by regulations made by
HMRC Commissioners.

(2) The time at which goods are presented to Customs on import is the later of—

(a) 30the time at which the notification of importation in accordance with the
regulations is received by HMRC, and

(b) the time at which the goods are imported into the United Kingdom.

(3) For the purposes of this Part, goods are presented to Customs on export if
notification of their export from the United Kingdom is given to HMRC in
35accordance with provision made by regulations made by HMRC
Commissioners.

(4) The notification must be given before the export of goods unless provision is
made by regulations made by HMRC Commissioners authorising the
notification to be given at a later time.

(5) 40Regulations made by HMRC Commissioners may make provision for the
purposes of this section.

(6) Each of the following is an example of the kind of provision that may be made
by regulations under this section—

(a) provision requiring a notification to be accompanied by documents of
45a description specified in the regulations or in a public notice given by
HMRC Commissioners,

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(b) provision authorising a public notice given by HMRC Commissioners
to make provision about the form and contents of a notification,

(c) provision authorising a public notice given by HMRC Commissioners
to require notification to be made in accordance with provision made
5by the notice,

(d) provision requiring or authorising, in specified cases, notification of an
importation of goods to be given before the importation,

(e) provision deeming a notification to have been given in specified cases,
and

(f) 10provision requiring a notification to disclose the location of the goods.

35 Exports made in accordance with applicable export provisions

(1) This section defines for the purposes of this Part what is meant by an export of
goods from the United Kingdom being in accordance with the applicable
export provisions.

(2) 15The export of the goods is made in accordance with the applicable export
provisions if—

(a) the goods are presented to Customs on export, and

(b) the export is subsequently made in accordance with a procedure
provided for by regulations made by HMRC Commissioners.

(3) 20The regulations may—

(a) provide for the procedure to involve the making of a declaration by the
person making the export or any specified person,

(b) provide for requirements to be imposed on any person at any time
while the goods are subject to the procedure,

(c) 25make provision specifying, or otherwise determining, the period
during which the goods are to be regarded as subject to the procedure,

(d) deem, in specified cases, the export to have been made in accordance
with the procedure, and

(e) provide for goods to be subject to the control of any HMRC officer from
30a specified time.

(4) The provision which may be made as a result of subsection (3)(a) includes
provision applying or replicating the effect of—

(a) any provision made by or under Schedule 1 (Customs declarations), or

(b) any other provision made by or under this Part that operates (to any
35extent) by reference to a Customs declaration,

with or without modifications.

36 Outward processing procedure

(1) This section applies if—

(a) domestic goods have been presented to Customs on export, and

(b) 40the goods are declared for an outward processing procedure.

(2) A declaration of goods for “an outward processing procedure” is a
declaration—

(a) that the goods are to be exported from the United Kingdom in order to
be processed outside the United Kingdom,

Taxation (Cross-border Trade) BillPage 23

(b) that the processing is to take place during a temporary period at the end
of which the goods are to be imported into the United Kingdom, and

(c) that the processing is to be carried out in accordance with requirements
imposed on any person by or under regulations made by HMRC
5Commissioners.

(3) The temporary period during which the processing is to take place is the period
specified in a notice given to the person making the declaration by an HMRC
officer.

(4) That period may be subsequently extended (or further extended) by another
10notice given as mentioned in subsection (3).

(5) If goods are declared for an outward processing procedure—

(a) the export of the goods is not one which is required to be made in
accordance with the applicable export provisions, but

(b) HMRC Commissioners may by regulations make provision in relation
15to any export under an outward processing procedure corresponding
to the provision that may be made by regulations under section 35.

(6) If the processing of the goods under an outward processing procedure consists
in their repair by any person without charge, the goods continue to be regarded
as domestic goods but only if, while the procedure has effect—

(a) 20there is no breach of the terms of the declaration for the procedure, and

(b) there is no breach of any other requirement in relation to the procedure.

(7) If the processing of the goods under an outward processing procedure consists
in anything else, the goods are to be regarded as chargeable goods, but if—

(a) the goods are imported in accordance with the procedure, and

(b) 25there is no breach of the terms of the declaration for the procedure, or
of any other requirement in relation to the procedure, while the
procedure has effect,

the value of the goods is to be reduced to take account of so much of that value
as can be attributed to the goods as they stood before being exported.

(8) 30HMRC Commissioners may make regulations for the purposes of this section.

(9) Each of the following is an example of the kind of provision that may be made
by the regulations—

(a) provision specifying cases in which goods may not be declared for an
outward processing procedure,

(b) 35provision imposing requirements on any person in relation to an
outward processing procedure,

(c) provision for determining the reduction in the value of any goods for
the purposes of subsection (7),

(d) provision authorised or required to be made by any regulations under
40Schedule 2, and

(e) other provision made by or under this Part of this Act that has effect in
relation to a special Customs procedure.

37 Minor definitions

(1) In this Part—

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  • “approved guarantee”, in relation to goods declared for the free-
    circulation procedure, means any guarantee given in accordance with
    regulations made under paragraphs 6 and 7 of Schedule 6,

  • “arrangements” includes an understanding of any kind,

  • 5CEMA 1979” means the Customs and Excise Management Act 1979,

  • “directions” means directions in electronic form or otherwise in writing,

  • “guarantee” includes any indemnity, surety, security and undertaking of
    any kind,

  • HMRC” means Her Majesty’s Revenue and Customs,

  • 10HMRC Commissioners” means the Commissioners for Her Majesty’s
    Revenue and Customs,

  • HMRC officer” means an officer of Revenue and Customs,

  • “notice”, except in the expression “public notice”, means a notice in
    electronic form or otherwise in writing,

  • 15“specified”, in relation to any regulations or public notice, means specified
    in, or determined in accordance with, the regulations or public notice,

  • “subordinate legislation” has the same meaning as in the Interpretation
    Act 1978, and

  • “the WTO” means the World Trade Organisation.

(2) 20In this Part any reference to a rate of duty includes a nil rate.

(3) In this Part any reference to goods being wholly obtained in any country or
territory includes—

(a) any case where the goods are grown, produced or manufactured only
in the country or territory, and

(b) 25any other cases specified in regulations made by the Treasury.

(4) In this Part any reference to the processing of any goods includes the following
activities—

(a) the erection, assembly, fitting or other working of the goods,

(b) the repair of the goods,

(c) 30the use of the goods for the purpose of facilitating the production or
manufacture of any other goods, and

(d) the destruction of the goods.

(5) Any reference in any provision of this Part to a public notice is to a notice
published by the Secretary of State, or (as the case may be) HMRC
35Commissioners, in such manner as the person giving the notice considers
appropriate for the purposes of that provision.

(6) In this Part—

(a) references to a territory outside the United Kingdom include the
European Union or any other international organisation or authority
40comprising territories outside the United Kingdom, and

(b) expressions relating to a territory outside the United Kingdom (such as
the government of a territory outside the United Kingdom or the law of
a territory outside the United Kingdom) are to be read accordingly with
the necessary modifications.

(7) 45For the purposes of this Part any reference to goods being subject to the control
of an HMRC officer includes control being exercised by—

Taxation (Cross-border Trade) BillPage 25

(a) requiring the goods to be handled, or otherwise dealt with, in
accordance with instructions given by an HMRC officer (whether given
orally or in any other way), or

(b) requiring the goods to be kept in any place specified by an HMRC
5officer.

(8) In the case of any reference in this Part to a person who makes a Customs
declaration—

(a) the reference is to the person actually making the declaration even if the
declaration is made on behalf of another person, and

(b) 10if a Customs declaration is made by a Customs agent in the name of the
principal, the reference is to the agent despite the provision made by
section 21(3).

38 Table of definitions

The following table sets out some of the expressions used in this Part, showing
15where they are defined or otherwise explained—

acceptance (of a Customs declaration) paragraphs 11(2) and 13(4)
of Schedule 1
the applicable export provisions section 35
approved guarantee (in relation to goods
declared for the free-circulation procedure)
section 37(1)
20
arrangements section 37(1)
an authorised use procedure paragraph 13 of Schedule 2
CEMA 1979 section 37(1)
chargeable goods section 2
control of HMRC officer 25section 37(7)
Customs agent section 21
Customs procedures section 3
customs tariff section 8
directions section 37(1)
domestic goods 30section 33
export (time of) section 5 of CEMA 1979
the free-circulation procedure section 3
guarantee section 37(1)
HMRC section 37(1)
HMRC Commissioners 35section 37(1)
HMRC officer section 37(1)

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import (time of) section 5 of CEMA 1979
import duty section 1
an inward processing procedure paragraphs 9 and 11 of
Schedule 2
notice (except in the expression “public notice”) 5section 37(1)
origin (of goods) section 17
person making a Customs declaration section 37(8)
presented to Customs on export section 34(3)
presented to Customs on import section 34(1) and (2)
processing (of goods) 10section 37(4)
public notice section 37(5)
rate of duty section 37(2)
special Customs procedure section 3
specified (in relation to regulations or public
notices)
section 37(1)
15
a storage procedure paragraph 2 of Schedule 2
subordinate legislation section 37(1)
a temporary admission procedure paragraph 15 of Schedule 2
territory outside the United Kingdom (and
related expressions)
section 37(6)
20
the TRA section 13
a transit procedure paragraph 5 of Schedule 2
value (of chargeable goods) section 16
wholly obtained (in the case of goods) section 37(3)
the WTO 25section 37(1)

Part 2 Export duty

39 Charge to export duty

(1) The Treasury may by regulations make provision for, and in connection with,
30the charging of a duty of customs (to be known as “export duty”) by reference
to the export of goods from the United Kingdom.

(2) The regulations may provide for export duty to be chargeable by reference to
the export of —

(a) all goods, or

Taxation (Cross-border Trade) BillPage 27

(b) goods of a description specified in the regulations.

(3) The regulations—

(a) may provide for export duty to be chargeable in accordance with a tariff
specified in the regulations (“the export tariff”),

(b) 5may provide for export duty to be chargeable by reference to value,
weight or volume or other measure of quantity or size, and

(c) may provide for the value of the goods and the other matters
mentioned in paragraph (b) to be determined in accordance with the
regulations.

(4) 10In considering whether to impose export duty, and, if so, the rate of duty that
ought to apply to any goods, the Treasury must have regard to—

(a) the interests of consumers in the United Kingdom,

(b) the desirability of maintaining and promoting the external trade of the
United Kingdom,

(c) 15the desirability of maintaining and promoting productivity in the
United Kingdom, and

(d) the extent to which the goods concerned are subject to competition.

(5) In considering whether to impose export duty, and, if so, the rate of duty that
ought to apply to any goods, the Treasury must also have regard to any
20recommendation about the rate made to them by the Secretary of State.

(6) In considering what recommendation to make, the Secretary of State must have
regard to the matters set out in subsection (4)(a) to (d).

(7) The provision that may be made by regulations under this section includes
provision replicating or applying, with or without modifications, any
25provision made by or under—

(a) Part

1

, or

(b) any other enactment relating to import duty.

(8) 30Paragraph 1 of Schedule 7 (replacement of EU customs duties) applies in
relation to this Part as it applies in relation to Part

1

(reading any reference to
import duty as a reference to export duty).

(9) 35In this section “specified” means specified in, or determined in accordance
with, the regulations.

40 Regulations under section 39: supplementary

(1) Regulations under section 39 are to be made by statutory instrument.

(2) A statutory instrument containing—

(a) 40the first regulations under that section, or

(b) any other regulations under that section the effect of which is an
increase in the amount of export duty payable,

must be laid before the House of Commons, and, unless approved by that
House before the end of the period of 28 days beginning with the date on which
45the instrument is made, ceases to have effect at the end of that period.

(3) The fact that a statutory instrument ceases to have effect as a result of
subsection (2) does not affect—

(a) anything previously done under the instrument, or

(b) the making of a new statutory instrument.

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(4) In calculating the period for the purposes of subsection (2), no account is to be
taken of any time—

(a) during which Parliament is dissolved or prorogued, or

(b) during which the House of Commons is adjourned for more than 4
5days.

(5) A statutory instrument containing regulations under section 39 other than
regulations to which subsection (2) applies is subject to annulment in
pursuance of a resolution of the House of Commons.

(6) Any power to make regulations under section 39 may be exercised—

(a) 10either in relation to all cases to which the power extends, or in relation
to those cases subject to specified exceptions, or in relation to any
specified case or description of case, or

(b) so as to make different provision for different purposes or areas.

(7) Any power to make regulations under section 39 includes—

(a) 15power conferring a discretion on any specified person to do anything
under, or for the purposes of, the regulations,

(b) power to make provision by reference to things specified in a notice
published in accordance with the regulations,

(c) power to make supplementary, incidental and consequential provision,
20and

(d) power to make transitional or transitory provision and savings.

Part 3 Value added tax

41 Abolition of acquisition VAT and extension of import VAT

(1) 25The Value Added Tax Act 1994 is amended as follows.

(2) In section 1 (imposition of charge to value added tax), in subsection (1)—

(a) omit paragraph (b) (which charges VAT on the acquisition in the
United Kingdom of goods from other member States), and

(b) for paragraph (c) substitute—

(c) 30on the importation of goods into the United Kingdom,”.

(3) For section 15 substitute—

15 Meaning of “importation of goods” into the United Kingdom

(1) This section determines for the purposes of this Act when, and by
whom, goods are imported into the United Kingdom.

(2) 35Goods are imported when they are declared for a Customs procedure
under Part

1

of TCTA 2018.

(3) But—

(a) 40in the case of goods declared under TCTA 2018 for a storage
procedure, a transit procedure or an inward processing
procedure, the goods are imported when a liability to import
duty is, or on the relevant assumptions would be, incurred in
respect of them under section 4 of that Act, and

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(b) in the case of goods which are liable to forfeiture as a result of
section 5(1) of, or paragraph 1(5) or 3(4) of Schedule 1 to, that
Act (goods not presented to Customs or Customs declaration
not made), the goods are imported when they become liable to
5forfeiture as a result of those provisions.

(4) Each person who is, or on the relevant assumptions would be, liable to
import duty in respect of goods imported into the United Kingdom is a
person who has imported the goods.

(5) For the purposes of this section “the relevant assumptions” are—

(a) 10an assumption that a liability to import duty at a nil rate is
replaced by a liability to import duty at a higher rate, and

(b) an assumption that no relief from import duty is available.

(6) If two or more persons are regarded as importing goods, those persons
are jointly and severally liable to any VAT that is payable on the
15importation.

(7) The preceding provisions of this section are to be ignored in reading
any reference to importation or to an importer in anything applied for
the purposes of this Act by section 16(1) or (2).

(8) But subsection (7) does not apply so far as the context otherwise
20requires or provision to the contrary is contained in regulations under
section 16(3).”

42 EU law relating to VAT

(1) Any EU regulation so far as applying in relation to value added tax, and any
direct EU legislation so far as relevant to any such regulation, that form part of
25the law of the United Kingdom as a result of section 3 of the European Union
(Withdrawal) Act 2018 cease to have effect (but, in the case of the implementing
VAT regulation, see also subsection (5)).

(2) In the application of section 4(1) of that Act (saving for EU rights, powers,
liabilities, obligations, restrictions, remedies and procedures) in relation to
30value added tax, the rights, powers, liabilities, obligations, restrictions,
remedies and procedures mentioned there are subject to any exclusions or
other modifications made by regulations made by the Treasury by statutory
instrument.

(3) Further provision relevant to the law relating to value added tax is made by the
35European Union (Withdrawal) Act 2018: see, for example, section 6 of that Act
(interpretation of retained EU law).

(4) One of the consequences of the provision made by that Act is that the principle
of EU law preventing the abuse of the VAT system (see, for example, the cases
of Halifax and Kittel) continues to be relevant, in accordance with that Act, for
40the purposes of the law relating to value added tax.

(5) Where the principal VAT directive remains relevant for determining the
meaning and effect of the law relating to value added tax, that directive is to be
read for that purpose in the light of the provision made by the implementing
VAT regulation but ignoring such of its provisions as are excluded by
45regulations made by the Treasury by statutory instrument.