On 19 May, the UK Government announced the UK’s new MFN tariff regime, the UK Global Tariff (UKGT), which will replace the EU’s Common External Tariff on 1 January 2021, at the end of the Transition Period. The UKGT was designed following consultation period, during which the Government received 1,394 responses.
The tariffs will apply to all goods imported into the UK, unless an exception such as a preferential arrangement or tariff suspension applies. In particular, this tariff will not apply to goods coming from developing countries that benefit under the Generalised Scheme of Preferences, or to goods originating from countries with which the UK has negotiated a free trade agreement (FTA).
The new tariff is expected to make it easier and cheaper for businesses to import goods from overseas. The UKGT also offers lower tariff regime than the EU’s Common External Tariff (EU CET) and will be in pounds (£) rather than euros.
The new approach to tariff schedule streamlines and simplifies nearly 6,000 tariff lines and lowers costs for businesses by reducing administrative burdens. The changes include scrapping unnecessary tariff variations, rounding tariffs down to standardised percentages, and getting rid of all “nuisance tariffs” (those below 2%).
The UKGT also moves away from the EU’s Meursing table, which will allow the UK to remove many of tariff variations on products.
Furthermore, it also expands tariff free trade by eliminating tariffs on a wide range of products, ensuring that 60% of trade will come into the UK tariff free on WTO terms or through existing preferential access from January 2021, and successful FTA negotiations will increase this.
The following website includes a CSV file with the entire tariff line and can be downloaded. Number of reductions to 0% in the electronics sector is a welcomed news. However, some product lines have retained the previous levels, such as the 14% duty on TVs/monitors.
The new UKGT scheme is expected to provide businesses with much needed clarity on post-Brexit trade. However, businesses will need time to assess the detail. Ensuring there is a system in place to address issues as they arise will be critical.