The Government has released the UK’s new most-favoured nation (MFN) tariff regime, the UK Global Tariff (UKGT). This will replace the EU’s Common External Tariff on 1 January 2021 at the end of the Transition Period.
The tariff assumes that no Free Trade Agreement is agreed with the EU and will apply unless an exception applies, for example, the goods you’re importing:
– are from a developing country that pays less or no duty because it’s part of the Generalised Scheme of Preferences (GSP)
– are from a country that has a trade agreement with the UK
– have a relief or tariff suspension that’s operated by the UK
In total, 60% of UK imports will be tariff free in January under this scheme and the preferential trade deals that exist with some countries.
The government’s stated aim is to have 80% of trade covered by free trade deals in three years which will necessitate reaching agreements with the EU and US.
Talk to us now to:
1. Check your commodity codes and new duty rates
2. Investigate origin rules for imports/exports
3. Calculate the impact of relevant duty reliefs
UKGT is broadly in line with EU tariff schedule, though it introduces a number of changes, including:
– removing tariffs on products which are used in UK production, not made in the UK or are a nuisance tariff of below 2%
– rounding tariffs down (to the nearest 2% below 20%, 5% between 20-50%, and 10% for tariffs over 50%) and moving complex agricultural tariffs to a single percentage
– removing the EU’s Meursing table of tariffs to allow the scrapping of thousands of tariff variations on products
– UKGT also removes tariffs on £30 billion worth of imports entering UK supply chains
The timing of Tuesday’s announcement is also a reminder to the EU of what is at stake if progress isn’t made in the ongoing trade talks, which are currently dead-locked.
The UKGT also provides a level of continuity and protection, maintaining tariffs to a number of UK sectors and industries, including:
– tariffs on agricultural products such as lamb, beef, and poultry to be maintained
– 10% tariff on cars to be maintained
– tariffs for the vast majority of ceramic products to be maintained
– maintaining some tariffs which support imports from the world’s poorest countries