What is minimum registration threshold?
To reduce the administrative burdens for those importing small quantities of CBAM goods and balance the cost of administering the UK CBAM against the carbon leakage objectives, the UK proposed for there to be a minimum registration threshold as is common practice across indirect tax regimes, and proposed to set the threshold by reference to the value of CBAM goods that the liable person is responsible for when the goods pass the tax point.
After consultation, UK government has decided to increase the value of the threshold to £50,000 of CBAM goods that pass the tax point over a 12 month rolling period to ensure that the costs of complying with the CBAM are more proportionate to the carbon leakage risk the government is seeking to address.
The UK estimated that increasing the threshold to £50,000 would also retain over 99% of imported emissions within the scope of the CBAM, whilst removing over 80% of otherwise registrable businesses. Over 70% of those removed from the CBAM altogether by this threshold are micro, small, or medium sized businesses.
The government will proceed with applying a forwards and backwards looking test to determine when a person becomes liable for the CBAM (exceeding eminimum threshold). The forward look test requires a person to look forward to the next 30 days and consider whether they expect the value of their CBAM goods passing the tax point to meet the £50,000 threshold. This makes a person liable to register for the CBAM from the day they expect to meet the test. Whilst the backward-looking test requires a person to look back over a rolling 365 day period to see if the value of their CBAM goods that passed a tax point met the £50,000 threshold. If so, the person becomes liable to register for the CBAM from the date they met the threshold.
Source: GOV.UK