40.These draft Regulations were originally laid by HM Revenue and Customs (HMRC) as a proposed negative instrument. The Sub-Committee recommended it should be upgraded to the affirmative resolution procedure, and HMRC has accepted this recommendation. The instrument ensures that the UK can collect information from individuals who are carrying cash in excess of £10,000 into or out of the UK by requiring them to complete a declaration to customs authorities. This is intended to enable the UK to build its own risk profiles, predominantly to tackle money laundering. UK Border Force will have the right to seize money where no declaration has been made, pending an investigation into its source and its intended use. The Impact Assessment accompanying the instrument explains that “currently 1,500 individuals complete a declaration annually and a five-fold increase is estimated on departing the EU. The additional costs of completing a declaration are assessed to be negligible.” These Regulations will not have any effect in relation to individuals carrying cash between Northern Ireland and the Republic of Ireland as HMRC has said that “further details on the arrangements for trade between Northern Ireland and Ireland will be published as soon as possible.”
41.The Sub-Committee saw this instrument as a proposed negative instrument and agreed that it should be upgraded to the affirmative resolution procedure, a recommendation which HM Revenue and Customs (HMRC) has accepted. The draft Regulations provide for an independent Economic Operator Registration Identification (EORI) system, meaning that businesses which currently trade only between the EU and the UK, or overseas businesses that will in future import in to the UK, will need to apply to HMRC for an EORI number. The Regulations would not have effect in relation to economic operators whose only customs activities consist of trading goods between Northern Ireland and the Republic of Ireland. HMRC explains that “further details on the arrangements for trade between Northern Ireland and Ireland will be published as soon as possible.”
42.The Sub-Committee considered this instrument when it was laid as a proposed negative instrument and agreed it should be upgraded to the affirmative resolution procedure, a recommendation which HM Revenue and Customs (HMRC) has accepted. In a ‘no deal’ scenario, UK exporters to the EU and other nations will have to complete safety and security declarations. Goods imported to the UK from the EU and other nations will also carry a safety and security declaration to enable border agencies to monitor goods coming into the UK and to prevent entry of illegal goods. Traders who wish to receive UK Authorised Economic Operator status, which will be valid only in the UK customs area, will have to complete an application process (even if they currently have such status in relation to the EU customs area).
43.Since the instrument was first laid as a proposed negative instrument, two changes have been made. First, the instrument temporarily removes the requirement to submit safety and security information via entry summary declarations for goods being imported from territories where the UK does not currently require entry summary declarations. This includes the EU, Norway, and Switzerland. This transitional period will be in place for six months. Second, it enables the movement of goods between the UK and the Channel Islands or Isle of Man without requiring declarations for safety and security purposes.
44.HMRC explains in the Explanatory Memorandum that “There is a strong possibility that businesses, such as hauliers and ferry operators, will suffer immediate hardship if the UK leaves the EU without a negotiated deal. They do not have the systems in place in readiness for exit day.” HMRC says that its discussions with these businesses about how their obligations could be met have resulted in the decision to introduce the six-month transitional period, and UK-Crown Dependency provisions. After the transitional period, HMRC acknowledges that “businesses will have additional administrative and financial burdens. They will need to adapt their processes and systems to meet the requirement to make safety and security entry summary declarations prior to arrival of goods in the UK.” The Government have announced an extra 300 border staff in preparation for ‘no deal’ and an additional 1,000 staff in the future.
45.These Regulations, laid by HM Revenue and Customs (HMRC), make a number of changes to earlier instruments relating to tax credits, Child Benefit and Tax-Free Childcare: details are set out in section 7 of the Explanatory Memorandum (EM). Of particular interest are the changes made to the Tax Credits (Definition and Calculation of Income) Regulations 2002 (SI 2002/2006), so as to provide a disregard from a person’s income for tax credits, for any payments made under any compensation scheme established by the Home Office in respect of Windrush Generation citizens (as well as any interest arising on these payments within the 52-week period from the date the payment is made). In the EM, dealing with this disregard, HMRC refers to the Government’s recognition that certain Commonwealth citizens known as the Windrush Generation have been adversely affected by measures introduced under the Home Office’s compliance laws.
12 Tax Credits (Definition and Calculation of Income) Regulations 2002 ().