The UK Global Tariff (UKGT) has been released. UKGT will be the UK’s new most-favoured nation (MFN) tariff regime (replacing the EU’s Common External Tariff) on 1 January 2021, 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;
• are from a country that has a trade agreement with the UK; or
• have a relief or tariff suspension that’s operated by the UK.
Changes; 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; and
• 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.
Continuity; 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; and
• maintaining some tariffs which support imports from the world’s poorest countries who have preferential access to the UK market.
Coronavirus;
• Almost all pharmaceuticals and most medical devices (including ventilators) are tariff free in the UKGT.
• While some products used to fight Coronavirus maintain a tariff, the UK has introduced a temporary zero tariff rate on these products. This relief waives the tariff and VAT for PPE, medical devices, disinfectant and medical supplies from non-EU countries.
Key takeaways ;
• The UKGT is estimated to ensure that around 60% of trade will come into the UK tariff free on WTO terms or through existing preferential access from January 2021. Future trade agreements will increase this proportion.
• The UKGT will provide important leverage in future trade talks with EU, US, New Zealand, Japan and other key trading partners.
• The UKGT increases the importance of getting a trade deal with the EU to avoid an increase in business costs and a negative impact on the wider economy.
Click here to access the full UK Global Tariff schedule.
