UK Global Tariff backs UK businesses and consumers
On 19 May 2020 the government announced the UK’s new MFN (Most Favoured Nation) tariff regime – the UK Global Tariff (UKGT). This will replace the existing EU Common External Tariff on 1 January 2021 at the end of the Brexit Transition Period. The UKGT will apply to goods exported from countries with which the UK does not have a preferential agreement.
According to the government, the new tariff will support the economy by making it easier and cheaper for businesses to import goods from overseas and allow UK industries to compete on the global stage. The UKGT has simplified nearly 6,000 tariff lines to reduce administrative burdens and the new tariffs are a lower tariff regime than the EU’s Common External Tariff (EU CET).
The Government has confirmed that the UKGT ensures that 60% of trade will come into the UK tariff free on WTO terms or through existing preferential access from January 2021, and successful Free Trade Agreement negotiations will increase this.
The UKGT was designed following widespread engagement with businesses across the UK. As it will come into force on 1 January 2021, it’s important that businesses familiarise themselves with the new tariff regime ahead of this date.
The new tariffs can be accessed by the following link here
The features of the new UKGT are:
- Getting rid of the existing tariff variations on 13,000 products – like biscuits, waffles, pizzas, quiches, confectionery, and spreads.
- As the UK will be leaving the EU on 31st December 2020, the new tariffs will be in pounds (£), not euros (€).
- The Government is maintaining tariffs on a number of products backing UK industries such as agriculture, automotive and fishing.
- Some tariffs are also being maintained (for example vanilla (6%), plantains (16%) and bedlinen (12%)) to support imports from the world’s poorest countries that already benefit from preferential access to the UK market.
- Some tariffs have been reduced to zero such as dishwashers, freezers and some energy efficient products such as thermostats and LED lamps.
For more information please contact Naveen Sahney, VAT + Custom Duties Advisor email@example.com.