The Carbon Border Adjustment Mechanism (Administrative Provisions) Regulations 2026

Published: Tue 14th Jul 26

These regulations establish the administrative framework for the UK Carbon Border Adjustment Mechanism (CBAM), detailing the requirements for persons importing CBAM goods into the United Kingdom.

The document directs importers to register with HM Revenue and Customs (HMRC), maintain specific records for six years, and submit returns containing commodity codes, product weights, and origin data.

It further authorizes HMRC officers to estimate the weight of goods for tax purposes if records are insufficient and sets strict conditions for reimbursement arrangements to prevent the unjust enrichment of claimants.

Arguments For

The legislation states that these provisions are necessary to facilitate the administration of the carbon border adjustment mechanism as established by the Finance Act 2026.
Proponents within the document's framing suggest the regulations provide clarity on the valuation and weighing of goods for the purposes of calculating tax liability.
The document indicates that record-keeping requirements ensure that HMRC can verify the accuracy of returns and prevent tax evasion.
The explanatory note highlights that a Tax Information and Impact Note was published to summarize the anticipated economic and administrative impacts of the instrument.

Arguments Against

Legal scholars may question the complexity of the valuation rules, which vary depending on whether goods enter Great Britain or Northern Ireland and their relationship to the Isle of Man.
Business groups might express concern regarding the administrative burden of keeping detailed 8-digit commodity code records and origin data for six years.
Importers may find the 90-day window for reimbursement arrangements restrictive, particularly in complex supply chains where identifying and paying third parties takes more time.
The broad power granted to Revenue and Customs officers to determine weights based on "estimates or assumptions" could be challenged as potentially leading to inconsistent or arbitrary tax assessments.

Part 1 Introductory provisions

Citation and commencement

-(1) These Regulations may be cited as the Carbon Border Adjustment Mechanism (Administrative Provisions) Regulations 2026.

(2) These Regulations come into force on 1st January 2027.

This section provides the official title of the regulations and sets the date they take legal effect.

The regulations become active on 1 January 2027.

Interpretation

In these Regulations, unless stated otherwise, references to-
(a) sections are to sections of the Finance Act 2026;
(b) Parts and paragraphs of Schedule 17 are to Parts and paragraphs of Schedule 17 to the Finance Act 2026.

This section defines how the text should be read in relation to other law.

It specifies that any reference to sections or schedules refers to the Finance Act 2026 unless otherwise noted.

Meaning of value of CBAM goods

-(1) For the purposes of Part 2 of Schedule 17, the value of a CBAM good is to be determined in accordance with this regulation, and references to the value of a CBAM good in regulations 5 and 7 are to be construed accordingly.

(2) In the case of a CBAM good which is described in section 144(2) or (3), the value of that CBAM good is the same as the value determined for customs purposes in accordance with Part 12 of the Customs (Import Duty) (EU Exit) Regulations 2018.

(3) In the case of a CBAM good which is described in the following subsections of section 144-

(a) subsection (5)(b), but only in a case where the import results from entry into Great Britain from the Isle of Man,
(b) subsection (5)(c),
(c) subsection (5)(d),
(d) subsection (6),

the value of that CBAM good is to be determined in accordance with Part 12 of the Customs (Import Duty) (EU Exit) Regulations 2018, as if the CBAM good is a chargeable good, and has been presented to Customs on import, for the purposes of Part 1 of TCTA 2018.

(4) In the case of a CBAM good which is described in the following subsections of section 144-

(a) subsection (4), but only in cases where that good is not taken out of the charge to duty under section 30A(3) or 40A(1)(a) of TCTA 2018 by regulations made under section 30B(1)(a) or 40B(1)(a) of that Act, or
(b) subsection (5)(b), but only in cases where the import results from entry into Northern Ireland from the Isle of Man,

the value of that CBAM good is the same as the value of those goods determined for customs purposes in accordance with Chapter 3 of Title II of UCC 2013.

(5) In the case of a CBAM good which is described in the following subsections of section 144-

(a) subsection (4), but only in cases where that good is taken out of the charge to duty under section 30A(3) or 40A(1)(a) of TCTA 2018 by regulations made under section 30B(1)(a) or 40B(1)(a) of that Act, or
(b) subsection (5)(a),

the value of the CBAM good is to be determined in accordance with Chapter 3 of Title II of UCC 2013.

(6) For the purposes of a determination under the applied legislation referred to in paragraph (5), the CBAM good is to be treated as if it-

(a) is a chargeable good for the purposes of Part 1 of TCTA 2018, and
(b) has been brought into the customs territory of the European Union.

(7) For the purposes of a valuation under the applied legislation referred to in paragraphs (3) to (5), goods that are expected to be imported for the purposes of paragraph 2(2)(b) of Schedule 17 are to be treated as imported goods.

(8) In paragraph (3), 'presented to Customs on import' has the meaning given by section 34 of TCTA 2018.

This provision establishes how the monetary value of imported goods is calculated to determine tax liability.

Depending on the specific circumstances of the import and the territory involved (Great Britain, Northern Ireland, or the Isle of Man), the value is determined using either UK customs regulations or the EU's Union Customs Code.

It directs that goods expected to be imported in the future must be valued as if they were already imported for registration purposes.

Meaning of weight of CBAM goods

In these Regulations, references to the weight of a CBAM good are to the weight of that good-
(a) without packing materials and packing containers of any kind,
(b) at the time that good is imported into the United Kingdom,
(c) expressed in kilogrammes.

This section defines 'weight' for tax calculation purposes.

It requires that the weight be measured in kilograms at the time of import and must exclude all packaging and containers.

Part 2 Record-keeping

Requirements to keep records

A person who imports a CBAM good in the course of a business must keep a record evidencing the following for that good-

(a) the 8 digit commodity code and description for the good;
(b) the date the good was imported into the United Kingdom;
(c) the value of the good;
(d) the weight of the good.

This provision mandates that business importers maintain specific documentation for every relevant good brought into the country.

The records must confirm the 8-digit commodity code, the import date, the total value, and the net weight.

Preservation and form of records

-(1) This regulation applies to records required to be kept under these Regulations, excluding regulation 17.

(2) Where the record relates to an accounting period that record must be preserved for a period of 6 years beginning with the day after the end of the accounting period.

(3) In any other case, the record must be preserved for a period of 6 years beginning with the day on which the record is created.

(4) All records must be kept and preserved in writing.

This section sets a six-year retention period for all required documentation.

It requires that these records be maintained in written form, indexed either from the end of a tax accounting period or from the date the record was first created.

Part 3 Registration

Information to be provided on registration

-(1) A person who is required to register with HMRC under paragraph 2(1) of Schedule 17 must provide the following information when registering-

(a) the person's name, correspondence address, telephone number and (where available) email address,
(b) where information is provided by an officer or employee of the person on behalf of that person, the officer's or employee's name, position in the business, telephone number and (where available) email address,
(c) the address of the person's principal place of business (if different from sub-paragraph (a)),
(d) whether the business is carried on by an individual, a limited company, partnership or other unincorporated body, or in any other capacity,
(e) the person's EORI number,
(f) the person's VAT registration number, if that person has such a number,
(g) the date on which the person triggered registration under paragraph 2(2) of Schedule 17,
(h) the value of the CBAM goods which the person imported, or expects to import, during the period specified by paragraph 2(2)(a) or (b) of Schedule 17, as applicable, and
(i) the estimated weight of the CBAM goods in each CBAM sector which the person expects to import into the United Kingdom in the period of 12 months beginning with the date on which the person triggered registration.
(2) In this regulation-

'EORI number' means a valid Economic Operators' Identification Number assigned by HMRC...;

'VAT registration number' means the number allocated by the Commissioners to a person registered under the Value Added Tax Act 1994.

This section lists the specific personal and business data that importers must submit to HMRC during the registration process.

It includes contact details, legal business structure, tax identification numbers (EORI and VAT), and projections for the value and weight of goods expected to be imported over the following year.

Record-keeping for registration

A registered person must keep records evidencing the information required to be provided under regulation 7.

This provision requires registered importers to maintain evidence supporting the information they submitted during registration.

It ensures that the data used to trigger the registration requirement can be audited by tax authorities.

Part 4 Returns

Interpretation of this Part

In this Part, 'the place of origin of the good' is to be determined in accordance with provision made under section 17(1) to (6) of TCTA 2018 that is applicable to the customs tariff, as defined in section 8 of TCTA 2018...

This section clarifies how the origin of goods must be identified for tax returns.

It applies the same standards used for general UK customs tariffs to determine which country a product is officially from.

Information to be included in a return

-(1) Where a person is required to make a return under paragraph 7 of Schedule 17, the return must include the following information for each CBAM good imported during the accounting period in respect of which CBAM is charged-

(a) the 8 digit commodity code;
(b) the weight of the CBAM good;
(c) the amount of carbon price relief;
(d) the place of origin of the good.

(2) A return must include a declaration by the person making it that the return is, to the best of their knowledge, true and accurate.

(3) The Commissioners may publish a notice specifying additional information which is to be included in a return.

This provision outlines the mandatory contents of periodic tax returns.

Importers must report the commodity code, weight, origin, and any claimed carbon price relief for every good, while certifying the accuracy of the submission.

HMRC is authorized to require further information via public notice if necessary.

Record-keeping for returns

A person who makes a return for a CBAM good must keep records evidencing the place of origin of that good.

Importers are required by this section to maintain documentation that proves the country of origin for all goods listed in their tax returns.

This serves as the evidentiary basis for checking the accuracy of the reported origin.

Part 5 Assessment of weight

Assessment of weight by an officer of Revenue and Customs

-(1) Paragraph (2) applies where it appears to an officer of Revenue and Customs that a person has-

(a) failed to give the correct weight of a CBAM good to the Commissioners in a return, or
(b) failed to keep any records under regulation 5(d).

(2) The officer may determine the weight of a CBAM good for the purposes of CBAM.

(3) In making a determination under paragraph (2), the officer may-

(a) make estimates or assumptions;
(b) make comparisons between the CBAM good in question and products or materials that are similar in nature, and may rely on any evidence that officer may have as to the weight of such similar products or materials;
(c) rely on any information or documents, including information or documents obtained in the course of an inspection.

(4) Where an officer makes a determination under this regulation, the officer must notify the person identified in paragraph (1) in writing.

This section authorizes HMRC officers to personally determine the weight of goods if an importer provides incorrect data or fails to keep required records.

The officer is permitted to use estimates, comparisons to similar products, or inspection documents to reach this determination and must notify the importer in writing.

Part 6 Reimbursement arrangements

Interpretation of this Part

In this Part-

'claim' means a claim made under paragraph 25 of Schedule 17 and 'claimed' is to be construed accordingly;

'claimant' means a person who makes a claim;

'relevant amount' means that part (which may be the whole) of the amount of the claim which a claimant has reimbursed or intends to reimburse to other persons.

This section defines the technical terms used in the rules regarding tax repayment claims.

It specifically focuses on the 'relevant amount' which refers to money the claimant plans to pass back to other affected parties.

Reimbursement arrangements: general

For the purposes of paragraph 26(2) of Schedule 17, reimbursement arrangements made by a claimant are to be disregarded except where they-

(a) include the provisions described in regulation 15, and
(b) are supported by the undertakings described in regulation 18.

This regulation states that HMRC will only recognize arrangements to reimburse third parties if those arrangements meet strict transparency and security criteria.

If these criteria are not met, the arrangements cannot be used as a defense against claims of 'unjust enrichment' during a repayment process.

Reimbursement arrangements: provisions to be included

The provisions referred to in regulation 14(a) are that-

(a) reimbursement for which the reimbursement arrangements provide will be made before the end of the period of 90 days beginning with the day on which the repayment to which it relates was made,
(b) no deduction will be made from the relevant amount by way of a fee or charge (however expressed or effected),
(c) reimbursement will be made in a manner specified in a notice published by the Commissioners,
(d) any part of the relevant amount that is not reimbursed by the end of the period referred to in paragraph (a) will be repaid by a claimant to the Commissioners, and
(e) any interest paid by the Commissioners on any relevant amount repaid by them will also be treated by a claimant in the same way as the relevant amount falls to be treated under paragraphs (a) to (d).

This section lists the mandatory rules for reimbursement plans.

Importers must complete reimbursements within 90 days, cannot charge fees for passing on the money, and must return any undistributed funds or interest to HMRC.

Reimbursement arrangements: repayments

Where a claimant is required to make any repayment to the Commissioners by virtue of regulation 15(d) or (e), a claimant must, without prior demand, make this repayment within the period of 14 days beginning with the day after the day on which the period referred to in regulation 15(a) ended.

This provision directs that any money that could not be successfully reimbursed to third parties must be paid back to HMRC within 14 days.

This obligation applies automatically without the need for HMRC to issue a specific demand for the funds.

Records relating to reimbursement arrangements: keeping and production

-(1) A claimant must keep records of the following matters-

(a) the name and address of each person that a claimant has reimbursed or that a claimant intends to reimburse,
(b) the total amount reimbursed to each person,
(c) the amount of interest included in the total amount reimbursed to each person, and
(d) the date that each reimbursement is made.

(2) A claimant must preserve the records for the period of 6 years beginning with the later of-

(a) the last day of the accounting period to which the records relate, or
(b) the day on which a claimant makes the reimbursement to which the records relate.

(3) Where an officer of Revenue and Customs gives a claimant notice in accordance with paragraph (4) below, a claimant must, in accordance with such notice, produce to the Commissioners or to an officer of Revenue and Customs the records that a claimant is required to keep pursuant to paragraph (1).

(4) A notice given for the purposes of paragraph (3) must be in writing and specify-

(a) the date on which and the place and time at which records are to be produced for inspection, or
(b) the date on which and the manner by which records are to be produced by delivery.

(5) All records referred to in this regulation must be kept and preserved in writing.

This regulation requires claimants to document the identities of individuals they reimburse and the specific amounts and dates involved.

These records must be kept for at least six years and must be produced for inspection if HMRC issues a formal written notice.

Undertakings

-(1) The undertakings referred to in regulation 14(b) must be given to the Commissioners by a claimant no later than the time at which a claimant makes the claim for which the reimbursement arrangements have been made.

(2) The undertakings must be in writing and be signed and dated by a claimant, and must be to the effect that-

(a) at the day of the undertaking, a claimant is able to identify the names and addresses of each person that the claimant has reimbursed or intends to reimburse,
(b) a claimant will apply the whole of the relevant amount repaid to them (without any deduction by way of fee, charge or otherwise) to the reimbursement of such persons, before the end of the period of 90 days beginning with the day after the day on which the claimant receives the amount (unless the claimant has already properly reimbursed the persons),
(c) a claimant will apply any interest paid on the relevant amount repaid to the claimant wholly to the reimbursement of such persons before the end of a period of 90 days beginning with the day after the day on which that interest is received,
(d) a claimant will repay to the Commissioners without demand the whole, or such part, of the relevant amount repaid or any interest paid to the claimant as the claimant fails to apply in accordance with the undertakings mentioned in sub-paragraphs (b) or (c),
(e) a claimant will keep the records described in regulation 17(1), and
(f) a claimant will comply with any notice given in accordance with regulation 17(4) concerning the production of such records.

This section specifies the formal promises (undertakings) a claimant must sign to qualify for a repayment claim involving third-party reimbursement.

The claimant must commit in writing to identifying all recipients, distributing the funds and interest within 90 days without fees, and complying with all HMRC record-keeping and audit requests.

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