From 1 January 2021, the UK will apply a UK-specific tariff to levy customs duty on imported goods. This UK Global Tariff (UKGT) will replace the EU’s Common External Tariff, which applies until 31 December 2020.
The UKGT will apply to all goods imported into the UK unless:
- an exception applies, such as a relief or tariff suspension
- the goods come from countries that are part of the Generalised Scheme of Preferences
- the country you’re importing from has a trade agreement with the UK
We have addressed each of these issues below.
The UKGT only shows the tariffs that will be applied to goods at the border when they are imported into the UK.
It does not cover:
- other import duties, such as VAT
- the precise details of trade remedies measures
- other restrictions on imports, such as anti-dumping, countervailing or safeguards
We have also briefly addressed these issues below.
Tariff Suspension from 1 January 2021
From 1 January 2021 the government will introduce its Most Favoured Nation tariff policy, replacing the current EU policy.
The UK Generalised Scheme of Preferences (GSP) from 1 January 2021
The UK GSP will continue to provide trade preferences to the same countries as the EU’s GSP. There will be 3 frameworks:
- least developed countries framework (LDCF)
- general framework
- enhanced framework
These frameworks will replicate the same market access as the EU’s GSP.
Trade Agreements which will be effective from 1 January 2021
The Andean countries (Colombia, Ecuador, Peru)
The Cariforum countries (most Caribbean states)
The Central America Association (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama)
The Eastern & Southern African Trade Bloc (Madagascar, Mauritius, Seychelles, Zimbabwe)
The Faroe Islands
The Pacific States (Fiji and Papua New Guinea)
The Palestinian Authority
The Southern African Customs Union & Mozambique (Botswana, Eswatini [Swaziland], Lesotho, Namibia, South Africa, Mozambique)
There are negotiations in place for others but it is unlikely that any will come into force between now and the end of the year.
Trade Remedies and Import Restrictions from 1 January 2021
The Trade Remedies Investigations Directorate is carrying out transition reviews in order to assess whether the current EU measures are appropriate for the UK market and whether these should be varied, changed or terminated.
Goods covered by a tariff-rate quota
Some products are covered by a tariff-rate quota. This allows a limited amount of a product to be imported at a zero or lower tariff rate.
The limit may be expressed in units of:
If this limit is exceeded, a higher tariff rate applies.
What are the key changes in customs duties?
European-built cars imported to the UK from 2021 are set to become around £1,500 more expensive as these vehicles would be subject to a 10 per cent tariff from 1 January 2021, in the absence of an EU-UK Trade Deal.
Under the new tariff, wine from countries like Italy, France and Spain would become around £2 more expensive for British consumers per bottle – a 50 per cent rise for some of the best value bottles of supermarket wine.
Goods like cheese, too, would become between 63p to 93p more expensive per 500g depending on the type.
Price rises would be imposed across all European food subject to tariffs, raising the price of, for instance, Italian tinned tomatoes by 14 per cent.
Staples like pasta would get 6 per cent more expensive, while a litre of olive oil would increase in price by nearly £1.20.
It is, however, the meat sector which faces the highest tariffs of all sectors under WTO rules, with an estimated average tariff rate close to 50% and exceeding 100% for some products. This would mean the price of meat imports in store could rise by 18% For example, prime gammon would rise from £7.50 to £8.85
Female hygiene products
The tariff will be zero, which was a key promise by prominent advocates of Brexit.
Tariffs on many metal parts, such as copper alloy tubes, steel screws and bolts will drop to zero.
Tariffs on vacuum flasks, bike inner tubes and LED lights will also drop to zero.
How to check the new customs tariffs
SRC-Time are one of the South East’s leading accountancy firms in advising individuals and businesses in all aspects of their accounting and tax affairs and we are able to assist in any issue raised above.
Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at firstname.lastname@example.org or speak with an account manager to get any process started.