The UK has left the European Union and entered a transition period. In light of this new relationship the Government have reviewed the excise duty and VAT treatment of goods purchased by individuals for their own use and carried across borders in their luggage. The Government are today announcing the rules which will apply to goods carried across borders by passengers travelling to and from Great Britain to countries outside the United Kingdom. These changes will apply from 1 January 2021 when the transition period comes to an end.
Currently these reliefs are largely set out in EU legislation, with different rules for those travelling to or from the EU, and those travelling to or from non-EU countries. This will have to be aligned following the transition period so that EU and non-EU passengers are treated equally. At spring Budget, on 11 March 2020, the Government published a consultation on the potential approach to goods carried across borders by passengers. There were a range of views and evidence submitted in response to that consultation and the Government have had to balance competing policy objectives, while taking into account the views of stakeholders. A full summary of responses to the consultation has been published alongside this statement.
This announcement focuses primarily on the treatment in GB. The Government continue to work with the Joint Committee on the implementation of the Northern Ireland protocol. The Government are also committed to providing guidance on how the Northern Ireland protocol will work, including for duty-free and tax-free goods, ahead of the end of the transition period.
The Government will make and lay a statutory instrument subject to the negative procedure before the House of Commons in due course to give effect to these changes from 1 January 2021. The below summarises the final policy decisions.