Policy & Compliance
person, although the former will not take on joint and several liability. BIFA’s concern on this issue is that because the document makes no reference to the thorny issue of ‘establishment’, it is unclear as to whether the Customs agent may potentially be regarded as liable. Given the complexity of emissions data, it would be difficult for a Customs agent to fulfil this function. The other area of this proposal that could impact the Customs agent is that the liable person will need to declare the net weight of imported goods on their CBAM returns. The consultation specifically references the inclusion of this information in a Customs declaration. This will require freight forwarders to exercise additional vigilance when completing a Customs declaration. Whilst this information may have limited impact on the calculations for duty and other taxes, it may have much greater bearing on calculating the tax for CBAM purposes. Liable person The consultation confirms that businesses regarded as the liable person will need to register with HMRC for the UK CBAM. They will be required to submit returns and pay the liability at the end of the accounting period. The liable person will be able to appoint a tax agent on their behalf to submit CBAM returns. BIFA’s belief is that the registration criteria can be used as the logical point to consider the previously mentioned ‘establishment’ issues The rest of the consultation looks at the thresholds for registering for the CBAM, the technicalities of calculating and reporting the emissions and, from the Customs agent’s viewpoint, the impacted tariff headings. It is envisaged that default values can be used for the first three years of the scheme’s functioning, but the emphasis is on the intention to move to actual verifiable data. BIFA encourages members to view the consultation document and submit a response direct to HMRC. Scan the QR code to access the consultation document on Gov.uk
Government launches UK CBAM consultation The UK CBAM will introduce a carbon price on the most emissions-intensive industrial goods imported into the UK “ BIFA’s concern on this issue is that because the
T he government has published its consultation document regarding the proposed implementation of a UK Carbon Border Adjustment Mechanism (CBAM). There is a 12-week consultation process lasting until 13 June 2024, with the intention to implement the UK CBAM in 2027. Carbon pricing is becoming an increasingly common method of encouraging decarbonisation. Imported goods are not subject to the UK Emissions Trading Scheme (ETS), meaning that the same carbon charges have not been levied on them as domestically produced items. The UK CBAM will introduce a carbon price on the most emissions-intensive industrial goods imported into the UK: aluminium, cement, ceramics, fertiliser, glass, hydrogen, and iron and steel products. ‘Carbon leakage’ The aim is to prevent ‘carbon leakage’, which is the movement of production and its associated emissions from one country to another in an attempt to avoid emissions reduction schemes. The goal is to ensure that the same carbon price is paid, regardless of where the goods are produced, thus creating a level playing field between the UK and other
manufacturing countries. It is important to note that the government proposes that imported scrap goods within the aluminium, glass and iron and steel sectors will be outside the scope of the UK CBAM. Looking in brief at the main proposal, the tax point (the point at which the CBAM liability arises) will be either: • Where goods are subject to Customs control, the date on which the goods are released into free circulation, or • Where there are no Customs controls, the date on which the CBAM goods first enter to the UK. In addition, the government proposes that the liable person responsible for the CBAM charge will be either: • Where there are Customs controls, the person responsible for the goods when they are released into free circulation. This means the liable person could be the importer of the CBAM goods, but this is not always the case because goods can be sold whilst under Customs control, or • Where there are no Customs controls, the person on whose behalf the goods are moved to the UK. The government proposes that a tax agent can act for a liable
document makes no reference to the thorny issue of ‘establish- ment’, it is unclear as to whether the Customs agent may potentially be regarded as liable
www.bifa.org
May 2024 | 21
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