The Windsor Framework: a new way forward

The Windsor Framework seeks to address issues for trade and indirect tax under the Northern Ireland Protocol.

The Windsor Framework

As widely reported, the Government has announced details of ‘The Windsor Framework’ which has been agreed in principle by the UK and EU. When the UK left the EU the issue arose as to how the UK and EU would ensure that goods could not move via Northern Ireland and across the land border to the Republic of Ireland unless checks took place to ensure that import procedures and customs duties were accounted for and VAT rules adhered to. This also had to be done without creating a physical border between Northern Ireland and the Republic of Ireland. The Northern Ireland Protocol was implemented with effect from 1 January 2021. However, the new rules created increased administration, uncertainty, additional costs and ultimately a disruption in trade to and through Northern Ireland. The Windsor Framework, details of which were announced on 27 February 2023, seeks to address these issues.

The Government’s Command paper notes that the Protocol “has already led to significant disruption in the links between Great Britain and Northern Ireland”. In summary the proposals are:

Customs and Trade

Green Lanes - A system of ‘green lanes and red lanes’ to ease the flow of trade from Great Britain (GB) to Northern Ireland (NI). Goods shipped from GB, which are staying in NI, will use the green lane at NI ports, meaning they will not have to be checked and will require minimal paperwork. Only trusted traders will be allowed to use this scheme.

Red Lanes - for goods at risk of moving to the EU, the now ‘usual’ customs procedures and paperwork will apply.

Parcel simplifications – these include, for consumer to consumer and business to consumer parcels under certain limits, no requirement for any customs formalities.

Agri-food – subject to requirements, retail products for end consumption in NI will be able to move from GB with minimal certification requirements and controls.


Under the existing Protocol, NI remains part of the UK VAT regime but is aligned with the EU rules for goods (but not services). For goods moving between mainland UK and NI, checks effectively take place in the Irish Sea rather than at a border. This has created additional accounting burdens and anomalies and also means that the EU legislators and Court have a say on laws on goods supplied to and traded in NI.

The framework will allow NI to zero rate the installation of energy-saving materials such as heat pumps and solar panels. Other changes include:

  • Removing the limit on the number of reduced and zero rates in NI;
  • Flexibility on future rates, by establishing new categories that can be applied for VAT purposes where goods are consumed in NI;
  • Protecting NI’s second-hand car market into the future with a new scheme (with effect from 1 May 2023);
  • Exempting NI businesses from a range of EU rules – including an exemption for businesses needing to register for VAT under a 2025 EU Directive; and
  • Establishing a brand new mechanism, enabling the UK and EU to look at future EU rule changes and make further legally binding changes to resolve any distortive impacts that new EU red tape could cause.

There is no specific timeframe for the implementation of the framework. Further documentation can be found on the Government’s Windsor Framework guidance page.

The devil will be in the detail but in terms of trade this means less paperwork, however accessing these frictionless trading arrangements will itself require administration and a more data driven compliance approach. In terms of VAT any changes to bring the rules in NI closer to that of the UK rules is a positive move.